[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE COMMERCIAL SPACE LAUNCH INDUSTRY:
SMALL SATELLITE OPPORTUNITIES AND CHALLENGES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON SPACE
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
April 19, 2016
__________
Serial No. 114-73
__________
Printed for the use of the Committee on Science, Space, and Technology
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Available via the World Wide Web: http://science.house.gov
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma EDDIE BERNICE JOHNSON, Texas
F. JAMES SENSENBRENNER, JR., ZOE LOFGREN, California
Wisconsin DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
MO BROOKS, Alabama ALAN GRAYSON, Florida
RANDY HULTGREN, Illinois AMI BERA, California
BILL POSEY, Florida ELIZABETH H. ESTY, Connecticut
THOMAS MASSIE, Kentucky MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma KATHERINE M. CLARK, Massachusetts
RANDY K. WEBER, Texas DONALD S. BEYER, JR., Virginia
BILL JOHNSON, Ohio ED PERLMUTTER, Colorado
JOHN R. MOOLENAAR, Michigan PAUL TONKO, New York
STEPHEN KNIGHT, California MARK TAKANO, California
BRIAN BABIN, Texas BILL FOSTER, Illinois
BRUCE WESTERMAN, Arkansas
BARBARA COMSTOCK, Virginia
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
RALPH LEE ABRAHAM, Louisiana
DRAIN LAHOOD, Illinois
------
Subcommittee on Space
HON. BRIAN BABIN, Texas, Chair
DANA ROHRABACHER, California DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma AMI BERA, California
MICHAEL T. McCAUL, Texas ZOE LOFGREN, California
MO BROOKS, Alabama ED PERLMUTTER, Colorado
BILL POSEY, Florida MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma DONALD S. BEYER, JR., Virginia
BILL JOHNSON, Ohio EDDIE BERNICE JOHNSON, Texas
STEVE KNIGHT, California
LAMAR S. SMITH, Texas
C O N T E N T S
April 19, 2016
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Brian Babin, Chairman, Subcommittee
on Space, Committee on Science, Space, and Technology, U.S.
House of Representatives....................................... 20
Written Statement............................................ 23
Statement by Representative Marc A. Veasey, Subcommittee on
Space, Committee on Science, Space, and Technology, U.S. House
of Representatives............................................. 25
Written Statement............................................ 27
Witnesses:
Mr. Elliot Pulham, Chief Executive Officer, Space Foundation
Oral Statement............................................... 32
Written Statement............................................ 35
Mr. Eric Stallmer, President, Commercial Spaceflight Federation
(CSF)
Oral Statement............................................... 42
Written Statement............................................ 44
Discussion....................................................... 55
Appendix I: Answers to Post-Hearing Questions
Mr. Elliot Pulham, Chief Executive Officer, Space Foundation..... 72
Mr. Eric Stallmer, President, Commercial Spaceflight Federation
(CSF).......................................................... 91
Appendix II: Additional Material for the Record
Statement submitted by Representative Eddie Bernice Johnson,
Ranking Member, Committee on Science, Space, and Technology,
U.S. House of Representatives.................................. 122
THE COMMERCIAL SPACE LAUNCH INDUSTRY:
SMALL SATELLITE OPPORTUNITIES AND CHALLENGES
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TUESDAY, APRIL 19, 2016
House of Representatives,
Subcommittee on Space
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:02 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Brian
Babin [Chairman of the Subcommittee] presiding.
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Chairman Babin. The Subcommittee on Space will come to
order. Thank you for being here.
Without objection, the Chair is authorized to declare
recesses of the Subcommittee at any time.
Welcome to today's hearing entitled ``The Commercial Space
Launch Industry: Small Satellite Opportunities and
Challenges.''
I recognize myself for five minutes for an opening
statement.
The commercial space industry truly is an amazing industry.
It generates hundreds of billions of dollars of economic
activity, serving both the private and public sectors, all
while pushing the boundaries of innovation and fostering the
United States as the global leader in space.
Part of this innovation is a new space spin-in phenomenon.
Computer, data analytics, and IT technologies having their
origin in our space program but more recently developed outside
of the space sector are being reapplied for space-specific
purposes.
Significant research and development investments are also
being made in the United States to create and manufacture new
types of small satellite technologies and application. One of
the largest barriers to that small satellite companies--that
they face is the cost of launch. Launch often accounts for a
significant portion of a small satellite's overall mission
cost.
Recent government incentives for launch vehicle development
may allow small satellite operators greater access to space.
New launch vehicle test flights present great opportunities for
small satellite operators to launch secondary payloads if the
companies are willing to accept the primary payload schedule,
mission profile, and mission risk.
The development of a small satellite industry is also
attracting investment for a new class of launch services to
serve the specific needs and requirements of smaller satellites
and associated on-orbit constellations. A number of American
companies in various stages of development plan on offering
dedicated launch services to the small satellite industry in
the next few years. These companies hope to fulfill the unmet
demand of the small satellite market. They also promise to
provide more flexible launch services such as delivery to
unique orbits and rapid replenishment.
There is a lot of change going on in the small satellite
and launch services industry. Winston Churchill once said,
``There is nothing wrong with change if it is in the right
direction.'' From my point of view, the investment and
innovation occurring in the small satellite and launch industry
is good for America, and it is an important step in the right
direction.
But change often presents both challenges and
opportunities. Companies are seeking to supply the demand for
greater small satellite launch capability in many unique and
innovative ways. Some solutions carry more risk than others.
Some solutions are easier to implement than others. Some
solutions require government action and some do not.
Today's hearing gives us the chance to explore these
challenges and opportunities. One policy challenge is excess
intercontinental ballistic missile motors. It is longstanding
national policy that excess U.S. ICBMs or their components
should not be used for commercial launch services. This policy
is established in the 1998 Commercial Space Act and reiterated
in the 2013 National Space Transportation Policy, which states:
``Excess U.S. ballistic missiles or their components shall
either be retained for government use or destroyed,'' and that
departments and agencies may use them on a case-by-case basis.
But should this policy be changed to allow greater use of
excess ICBM motors for commercial launch services? This isn't a
black-and-white issue, and the policy outcomes associated with
either keeping or modifying existing policy will create winners
and losers.
And those in favor argue that many U.S. small satellites
have launched on Russian DNEPR vehicles derived from Russian
ICBMs and that, by modifying existing U.S. policy, U.S. launch
services could compete with Russia and bring this business back
to America.
Those in favor also argue that there is a cost to the
taxpayer associated with storing excess ICBMs. By allowing the
U.S. commercial launch industry to use excess ICBMs, you not
only lower the tax burden but also create potential revenue
derived from the sale of these motors.
Those that oppose the policy change raise legitimate
concerns that allowing excess ICBMs to be used for commercial
launch purposes could distort the market in the United States,
undermine future investment, and delay innovations that are on
the horizon.
Access to foreign launch services is also a policy
challenge for the U.S. small satellite industry. And I've heard
from a number of companies that build and operate small
satellites that there isn't enough capacity in the market at a
price they can afford to meet their needs.
India has stepped in and offered to fill, in part, this
demand and is launching smaller satellites on their PSLV
vehicle. The Administration has provided a number of export
waivers on a case-by-case basis for these launches, in part
because India is becoming a strategic ally in South Asia.
Unfortunately, the Administration seems to lack a clear long-
term policy to guide access to PSLV launches. What should U.S.
policy be with regard to Indian and other foreign launch
vehicles?
Another factor that may impact the small satellite market
is reusability. We all watched with great awe the
accomplishments of Blue Origin and SpaceX when they launched
and recovered their first stages. ULA and Ariane are now
planning partially reusable systems as well. Will partial
reusability of launch systems lower launch costs significantly
and will it be the panacea for small satellite operators? Will
they be able to overcome many of the past issues with
reusability such as refurbishment and maintenance costs? Only
time will tell, but I'm excited about these recent
transformative developments.
Finally, are there any artificial government barriers to
expanding opportunities for secondary payloads, hosted
payloads, and rideshares? Is there anything that can be done to
assist in the aggregation of small satellites on a--on larger
vehicles so as to benefit from economies of scale? Are there
technologies or policies that could allow for greater
utilization?
There is a great deal of promise in the future of space,
but if we fail to provide long-term solutions to the issues
that our nation faces, we may well lose our leadership in
space. China stands ever-ready to fill that leadership void at
a national level. Russia and Europe will gladly fill that role
from a commercial perspective once again.
We must provide a competitive legal, policy, and economic
environment or other nations will happily step up. This would
lead to an eroded industrial base, decreased national
capabilities, declining international influence, and the loss
of a skilled workforce. I, for one, will not allow that to
happen on my watch.
I look forward to learning more about these critical issues
facing our commercial space industry and finding common ground
and responsible solutions that meet the needs of our nation,
grow our economy, and maintain our leadership in space.
[The prepared statement of Chairman Babin follows:]
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Chairman Babin. And now, I'd like to recognize the Ranking
Member, the gentleman from Texas, for an opening statement.
Mr. Veasey. Thank you, Mr. Chairman.
And good morning, and welcome to our distinguished panel of
witnesses.
I want to thank Chairman Babin, also a fellow Texan, for
calling this hearing.
Before I begin, though, I would like to note that we
received the final witness testimony statements and the hearing
charter less than 24 hours ago, and this has made it very tough
on member preparation and staff preparation likewise. And in
the future, I hope that we can receive the testimony and
charter in a more timely manner. That would be very, very
helpful.
Now, again, as a Texas Member, ensuring the continued
growth of the space industry and addressing the challenges
within emerging sectors such as the commercial launch industry
remain incredibly important to me and my fellow committee
members.
Thanks to the Johnson Space Center in Houston, Texas. They
have long been a leader on space issues. Now, as we move
forward with commercial spaceflight, Texas is positioned to be
a leader yet again with a growing presence of commercial tests
and launch sites in Texas. Companies like Blue Origin and
SpaceX are laying the groundwork for innovation and helping to
inspire the next generation of scientists and engineers with
their latest test sites in West and South Texas. The work of
the private space industry is helping change the landscape for
satellite launches by greatly driving down the cost of
delivering a payload safely to space.
Small satellite, also known as smallsats are contributing
to the emergence of new startup companies that aim to provide
rapid turnaround in services and technology advancement to
improve and expand services at a lower cost, especially in the
area of Earth observation and data provision.
U.S. leadership in this emerging industry has the potential
to both create jobs and economic growth for the nation and to
serve as an important source of U.S. innovation in an
increasingly competitve and changing global marketplace.
Additionally, universities and government agencies are
exploring the increased use of smallsats and for research,
education and training, technology development, and conduct of
government operations.
One of the major challenges that smallsats do face is
developing and building the spacecraft--is finding a way to put
the spacecraft in space and to do so in an affordable and
reliable manner. Today, options for placing a small payload in
space include the following: that is, using dedicated small
launchers, ridesharing as a secondary payload on a large
primarily conducted for another purpose, being a hosted payload
on a commercial satellite, and being ejected from a commercial
dispenser mounted on the International Space Station.
Unfortunately, smallsat users and operators are often
constrained in their choice of launch options due to individual
requirements, available budgets, and the unique characteristics
of each option. As a result, smallsat users and operators must
make tradeoffs between factors such as affordability, schedule,
risk, and orbital placement. For example, since the primary
payload customers dictates launch conditions, users and
operators of small satellites launched as a secondary payload
have no control on either the launch schedule or the
destination orbit of the launch vehicle. And while the
secondary payload customers must accommodate any delay by the
primary payload, they benefit from the lower launch cost.
On the other hand, smallsat customers who place a premium
on when the launch must occur and to what orbit the satellite
needs to be placed may opt to launch using a dedicated launch
vehicle despite that option's higher cost.
So it is not surprising that a number of providers are
seizing on this opportunity to offer additional launch options
to meet existing and projected demand by smallsats. Two recent
proposals have been made. The first is to allow the Air Force
to make its excess intercontinental ballistic motors available
for purchase and later in use in commercial launches. The
second is to facilitate U.S. commercial satellite operator
access to Indian launchers.
I hope that we can have an objective discussion with the
panel on the pros and cons of these proposals and identify
possible unintended consequences as well. Such a discussion is
critical because both of these proposals are likely to require
changes in statute and policy, which this committee would have
jurisdiction over.
However, we also need to hear from the relevant government
agencies, and I hope Mr. Chairman that we will have the
opportunity for a future hearing at which we can get the
perspectives of affected federal agencies.
In closing, it is clear that we need a thoughtful
discussion of these complex issues, one that will enable the
United States to capitalize on the innovation and job creation
that is sure to come from designing and building and using this
very exciting technology.
Thank you, Mr. Chairman, and I yield back the balance of my
time.
[The prepared statement of Mr. Veasey follows:]
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Chairman Babin. Thank you, Mr. Veasey. I appreciate it.
I would like to thank the witnesses for being here today,
and I'd like to introduce them. As you may know, last week was
the 32nd Space Symposium in Colorado. Both of our witnesses
have been extremely busy preparing for and attending the
symposium, and so I very much appreciate that they were able to
pull together their testimonies and attend this hearing on such
a short notice and short turnaround.
The committee received a number of letters from
stakeholders, and I ask unanimous consent to include them in
the record.
[The information follows:]
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Chairman Babin. And let me introduce our witnesses.
First is Mr. Elliott Pulham, our first witness today. He's
the Chief Executive Officer of the Space Foundation since 2001.
In his role at the Space Foundation, Mr. Pulham leads a premier
team of space and education professionals, providing services
to educators and students, government officials, news media,
and the space industry around the world.
Before joining the Space Foundation, Mr. Pulham was Senior
Manager of Public Relations, Employee Communication, and
Advertising for all space programs of Boeing, serving as
spokesperson at the Kennedy Space Center for the Magellan,
Galileo, and Ulysses interplanetary missions, among others. Mr.
Pulham has a degree in journalism and mass communication from
the University of Hawaii Manoa.
Second, Mr. Eric Stallmer, and we appreciate Mr. Stallmer
being here today as well. He's President of the Commercial
Spaceflight Federation since 2014. In his role, Mr. Stallmer
constantly promotes the industry and member companies through
his outreach of high-ranking officials and high-profile media
outlets. He also promotes the mission of CSF through
participation in multiple industry conferences throughout the
year.
Mr. Stallmer, has a master of arts degree in public
administration from George Mason University and a bachelor of
arts degree in political science and history from Mount St.
Mary College.
I now recognize Mr. Pulham for five minutes to present his
testimony.
TESTIMONY OF MR. ELLIOT PULHAM,
CHIEF EXECUTIVE OFFICER, SPACE FOUNDATION
Mr. Pulham. Thank you, Mr. Chairman, and thank you, Members
of the Committee. It's a pleasure to be here today, and I thank
you for the opportunity to testify on matters having to do with
the space launch and satellite markets.
In addition to my testimony, I'd like to enter into the
record a brief report on these markets, which is gleaned from
our online research source, ``The Space Report,'' which has
been included as an addendum to my remarks.
I'm here today to provide perspective and data on behalf of
the foundation. We're a 501(c)(3) nonprofit, nongovernmental
organization, and we strive to be an entity that all
stakeholders in the space policy realm can trust to provide
fair, balanced, and well-researched information.
The easiest way to characterize the current international
launch market is that it is highly competitive, abundantly
supplied with a variety of launch systems, and with new systems
and suppliers entering or attempting to enter the market
virtually every day. In 2015, there were 39 different major
launch vehicle models in operation, 39, and they accounted for
86 launches around the world. In simple math, this is less than
three launches per vehicle, which is not commercially
sustainable, and it means that some systems enjoy a backlog of
orders while many, many launches depend upon government
involvement of one kind or another.
Regarding the notion of permitting or prohibiting access to
foreign launch services, our experience is it's very hard to
characterize levels of government support for many competing
systems because of the different cultures, economies, types of
government, perceived societal roles, and so forth. But it is
safe to say that there are very few launch systems in the world
that have not has some kind of government support at one time
or another, although I think this is certainly beginning to
change with the advance in small commercial launch vehicles.
The issues I think before us have to do with fairness to
the satellite manufacturers of the United States and our
allies, reasonable access to launch options, and attention to
security concerns that do not constitute a broad or overly
restrictive reach by regulators.
The impact of ITAR restrictions over the past 20 years has
mostly been a body of unintentional consequences that have
injured U.S. satellite manufacturers while promoting the
development of so-called ITAR-free and no-U.S.-content
satellites in Europe and Asia. Many of the satellite orders,
once routinely filled by U.S. companies, are now filled by
others. Even good friends and allies who really, really would
like to buy American find themselves frustrated still.
Significant changes to ITAR have been made, but implementation
of the changes within the government has been slow.
Recently, there's been some discussion about allowing U.S.-
built satellites to fly on boosters such as the Indian PSLV.
This kind of discussion has taken place before in the case of
allowing U.S.-built satellites to fly on Chinese boosters,
which was permitted but came to an end in the late 1990s with
the failure of a Long March booster and the subsequent accident
investigation, which resulted in the ITAR changes mentioned.
Since then, no U.S. satellites have flown on Chinese boosters.
I think the concern about using Indian boosters is not so
much the transfer of sensitive technology to a nation that's a
fellow democracy, but rather whether the Indian launches are
subsidized by the government to a degree that other market
actors would be priced out of the market. I would point to the
chart that in my testimony that shows the launch rates for the
past decade. India has not managed to launch more than a half a
dozen times the year. They've also had some reliability
challenges with their systems, and I do not see them as a clear
and present danger to U.S. launchers quite yet.
Within the boom in small satellites, there is also a boom
in the development of launchers dedicated to the small side--
CubeSat, nanosat, whatever you want to call them--market. The
boom has numeric interest, but its market impact remains to be
seen. The total mass of nanosatellites launched in 2015 only
equals one percent of the total mass launched. If it were not
for the unique orbits required for various small satellite
missions, all 120 of the nanosats launched in 2015 with a
combined mass of less than 500 kilograms could have been
orbited on a single Delta II launch vehicle.
As regards to these new constellations that we're seeing,
we've seen a similar story before when forecasts for thousands
of new small satellites were envisioned for systems like
Teledesic, which I had some experience with. These led to
wildly ambitious launch forecasts in the '90s, which did not
materialize and have had a negative impact on national security
space ever since.
Then, as now, there was enthusiasm for the spin-in of
technology and management architectures from the non-space
world. But space was and is hard. The ability to succeed in
cellular communication did not translate into success in the
satellite marketplace in the '90s, nor does acumen in
information technology necessarily equate to satellite success
today. Many of the investments being made in small satellites
are driven simply by the smaller costs of the spacecraft. Small
cost and big capabilities seldom arrive hand-in-hand.
The other major policy considerations that accompany this
proliferation of small satellites has to do with the necessity
of getting our arms around a space traffic management regime
which will ensure continued long-term access to space for
operators of all sizes. And I'm sure you've all heard the three
C's. Space is congested, contested, and competitive, and it's
only getting more so.
I don't want you to think that I'm not excited about this
emerging sector or that it's necessarily doomed to the fate of
the Little LEO phenomena of the '90s, but rather I'm saying we
need to be cautiously optimistic and not overly bullish. At a
recent House Armed Services Committee, General Hyten said it
was incredibly difficult for the government to accurately
forecast launch industry trends and say with certainty where
the industry will be several years from now, and I would say
it's difficult for anyone to do that.
Technology improvements have resulted in better components,
less expensive technology. I'm not saying it's not as good as
the other satellite stuff that's out there. And the emerging
players do offer technology advances such as rapid iteration,
constantly increasing communication speed, bandwidth, et
cetera. These capabilities may in many cases be complementary
with legacy companies, products, and services. Pentagon's
recent outreach to Silicon Valley speaks to the recognition
that there are new things to be learned.
Partially or fully reusable launch vehicles have been the
Holy Grail in the space sector for ages. It is delightful to
see progress being made towards reusability.
And then wrapping up because I've abused my time, I just
want to finally address an issue that is larger than the focus
of today's hearing, which is the future of the country in space
and how we ensure U.S. leadership in space. Last month, the
Space Foundation, along with 13 other space-related
associations, including Mr. Stallmer's, released a paper,
``Ensuring U.S. Leadership in Space.'' The document is intended
to be a nonpolitical statement from the space industry to
inform candidates for office and educate them of how important
and essential space efforts, technologies, and capabilities are
for all Americans. I encourage you to read this document and
ask that you insert it in the record of this hearing.
Again, thank you for allowing me to go a little bit over my
time, and I look over to your questions.
[The prepared statement of Mr. Pulham follows:]
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Chairman Babin. Yes, sir. Thank you, Mr. Pulham. I
appreciate that.
And I would now like to recognize Mr. Stallmer for five
minutes for his testimony presentation.
TESTIMONY OF MR. ERIC STALLMER, PRESIDENT,
COMMERCIAL SPACEFLIGHT FEDERATION (CSF)
Mr. Stallmer. Thank you, Chairman Babin, and Members of the
Subcommittee, and thank you for holding this hearing today.
The Commercial Spaceflight Federation is the leading
national trade association for the commercial spaceflight
industry. Our members are responsible for the creation of
thousands of high-tech jobs driven by billions of dollars of
investment. Through the promotion of innovation, CSF is guiding
the expansion of Earth's economic sphere, bolstering U.S.
leadership in aerospace, and inspiring America's next
generation of engineers and explorers.
As the commercial space industry experiences rapid growth
in demand, the U.S. launch industry is responding. Presently,
the U.S. launch services market is dealing with demand in three
ways. First, companies are investing a substantial--substantial
capital in the development of a new class of small launch
vehicle systems, including Virgin Galactic, Firefly, Vulcan,
and Rocket Lab; second, through bundled satellite deals on
dedicated medium to intermediate lift rockets with SpaceX, and
soon, Blue Origin and Sierra Nevada's Dream Chaser; and
finally, through secondary payloads. Companies with small
satellites piggyback on larger satellite launches. PlanetLabs,
with its large constellation of small remote sensing
satellites, has flown to orbit as a secondary customer on a
number of flights already.
While small satellite customers benefit from being a
secondary payload through fractional pricing, we acknowledge
that the status as a secondary payload does result in tradeoffs
for the small satellite customer. The best solution for access
to space for small satellite companies would be when they're
dedicated U.S. small launch providers coupled with options for
bundled launch services on larger rockets and more
opportunities to ride to space as secondary payloads.
With the growth in demand for domestic space launch, the
need in the near term for the state-of-the-art launch
facilities is really necessary. There are numerous spaceports
that are well-positioned to support existing and new launch
vehicles that are coming online. The more U.S. launch vehicles
available will provide more opportunities to access space from
our many spaceports.
And even as the ink is still wet on last year's Space Act,
Congress is now facing efforts to reverse decades of sound
policy with respect to the commercial use of ICBM assets. The
vast majority--but I will note not all of CSF's 70 member
companies--oppose the efforts to reverse this policy. There are
some in the DOD and the defense industry that are advocating
for releasing old ICBM rocket motors for use in the commercial
marketplace. Those advocating for this changes seek to buy the
rocket motors at substantial discount and then compete against
U.S. companies that have developed their own launch
capabilities using private capital investment.
This proposal is counter to the longstanding U.S. law and
policy. Wholesale conversion of ICBMs into space transportation
vehicles risks placing the government in the position of
competing with the private sector. It could have long-term
consequences, and we've seen this in the past. Such behavior
risks undermining investor confidence as well.
By consistently reaffirming 30 years of U.S. commercial
launch policy, improving regulatory stability, and promoting
pro-growth policies, the United States Government has fostered
a healthy development of the U.S. commercial launch industry,
and we're seeing this policy bear fruit today. CSF encourages
this committee to pose any changes to the existing policy with
respect to the commercial use of ICBM assets, the reasons that
I've outlined in my written testimony.
CSF also opposes efforts to facilitate a government-
subsidized foreign launch company--in this case India--to
compete with U.S. companies. Such policy runs counter to many
national priorities and undermines the work and investment that
has been made by the government and industry to ensure the
health of the U.S. commercial space launch industrial base.
At the same time, we have to be cautious not to squeeze out
the U.S. satellite manufacturers and the operators that have
immediate launch needs which cannot be served by the
aforementioned U.S. commercial launch vehicles that will be
coming online later this year.
If it can be shown that there is no viable U.S. launch
opportunities in the given time frame to a required orbit,
launches on Indian vehicles should continue to be considered on
a case-by-case waiver review for U.S. payloads, as has been the
practice for the last several years. This practice should
continue while still relevant but with the knowledge that this
is definitely a temporary solution.
In conclusion, on behalf of my 70 member companies, I
appreciate the opportunity to testify in front of you today.
American industry is responding to market demands and
innovating on new technologies and outpacing any other country
in the world. We seek to preserve this national leadership in
space, and we look forward to working with this Congress to
achieve these goals.
I look forward to your questions.
[The prepared statement of Mr. Stallmer follows:]
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Chairman Babin. Thank you, Mr. Stallmer.
The Chair now recognizes himself for five minutes for
questions.
This is directed to both of you. The United States has
retained a number of excess intercontinental ballistic missiles
and component parts. Current law permits these ICBMs to be
converted for government use in space launch vehicles but only
if certain conditions are met. Current law does not permit
these ICBMs or their component parts to be converted to
commercial launch vehicles.
Recently, in SpaceNews we saw dueling op-eds written by
George Whitesides of Virgin Galactic and Scott Lehr of Orbital
ATK regarding how changing the current rules to allow access
ICBM motors to be used for commercial launches would impact
America's space industry. Lehr says that U.S. companies are
losing small satellite launches to international competitors--
specifically, Russia--because of these restrictions. Whitesides
argues that allowing excess government ICBMs to be used for
commercial launches would undermine the nascent U.S. small
satellite launch services industry, which is heavily invested
in the development of new launch vehicles.
What would be the advantages and disadvantages of amending
the law to permit wider use of excess ICBMs for commercial
space launch? Mr. Pulham or Mr. Stallmer, who wants to go
first?
Mr. Pulham. Thank you, Mr. Chairman. As you note, this is a
fairly recent and highly contentious issue. And at the
aforementioned Space Symposium last week, I had a considerable
amount of lobbying from both sides of the issue for many of our
member companies. And there's a disparity of opinion.
The Space Foundation has always prided itself on being a
consensus-based organization. We put together our pioneering
report that Congressman Bridenstine has incorporated in his
American Space Renaissance Act, and we took a year to do that
so that we could address all the concerns and make sure that
what we came forward with was something that the entire space
community would rally behind and benefit from, and similarly,
the white paper recently on ensuring the U.S. leadership in
space bringing 14 organizations and taking about seven months
to write what's essentially a three page paper.
Our view right now is there is not consensus on this issue,
and so we really are not going to take a stand one way or
another. I think that the ideas need to play themselves out in
the marketplace. I'm not a believer in the no-win scenario or
the zero-sum game. I think that there is probably a path
forward for consensus, but that will take some time.
Chairman Babin. Mr. Stallmer?
Mr. Stallmer. I will take the path of the choices--the
advantages or disadvantages. I'll lean to the disadvantages
first. Flooding the market with cheap government motors would
certainly tilt the playing field from the commercial industry.
There's many companies out there that have invested significant
amount of private sector investment in developing a
marketplace, developing vehicles to address this very market
that we're talking about.
The long-standing government policy which has been around
for 30 years, several different Administrations--is sound
policy. We saw the effects that it had of the government in the
marketplace during the shuttle era when the government was
launching commercial payloads. In 1980, the United States had
100 percent of the commercial launch market. By, I believe,
2010 we had zero percent of the commercial launch market.
So it's a dangerous precedent to go down. And there's a lot
of different reasons, not just the cost. It stunts innovation.
We have companies out there in Texas, and California, all over
the world, probably in every State that is represented here on
the dais, that are developing innovative technologies. And I
think a step back in this direction would be a tremendous one,
it would send a message in innovation and it would send a
tremendous message to the investment community on whether, you
know, government policy should be adhered to or followed as we
move forward.
A lot has been said on the type of these vehicles and the
cost savings to the Air Force. As we look at it, it's very
difficult to find that cost savings that the Air Force is
looking for.
And, Congressman Veasey, I apologize on the delay on the
testimony. As we mentioned, we were both out--Elliott in a much
greater fashion--at the Space Symposium where we worked
extensively with meetings with many of the different companies
that are involved in this issue and also where the Air Force
stands on this issue. And that's also a very difficult position
to find at times.
You can talk to some of the most senior members of the Air
Force that have no opinion or no knowledge of this issue on
Tuesday, and on Thursday the Air Force is coming out and
saying, you know, maybe we should evaluate this and there could
be a sweet spot but we don't want to upset the apple cart with
the commercial sector.
As far as the tax savings goes, a lot of it comes down--
what is said--it's the surveillance and monitoring and the
maintenance of this fleet of ICBMs. There's over 900 of these
potential muscles that the Air Force is safeguarding,
monitoring, and surveilling. If you just perhaps say that we're
going to give 50 of these motors to the commercial marketplace,
you still have 850 of these motors that you have to surveil and
monitor and watch and everything. If you rent storage space,
and just because you take, you know, some items out of the
storage space, you still have to pay for that storage space.
And also, this is a sunk cost that the taxpayers have paid for
for their intended purposes.
So there's a lot of concern with this and how it could
disrupt the marketplace. It can disrupt the private sector
investment. I certainly see it and the debate back and forth
has been tremendously cordial with the companies that are
involved and thoughtful.
And for my companies, we represent most all of the
spaceports in the United States. We have over 10 spaceports
that we represent. And I see the concern that they have because
to stay in business, you need to be launching vehicles. And I
am all for that and I want to see them grow. I want to see
other U.S. launch companies grow. But I think if you shut off
this--the capital investment by, you know, tilting the playing
field, it will certainly impact on other launch companies and
limit the amount of launch companies that could be launching at
these spaceports.
So I apologize for the long answer on that.
Chairman Babin. Okay, sir. Thank you.
Okay. Now, I'd like to call on the gentleman from Texas,
Mr. Veasey.
Mr. Veasey. Thank you, Mr. Chairman.
And I wanted to ask both members of the panel. There seems
to be a lot of emerging activity in both the smallsat and small
launcher arenas. A few years ago, dedicated small launchers
were greeted with lukewarm reception and the demand never
really materialized. What has changed this time around to make
the small launchers more attractive?
Mr. Stallmer. Money. I would say money. There's tremendous
investment capital. Elliott had mentioned earlier in the late
'90s with these pie-in-the-sky ideas, these large, huge
commercial constellations. I think the technology was almost
there but the funding wasn't there as much, and the capital
markets froze up. The capital markets aren't freezing up right
now, and there's a tremendous amount of investors. There's
crossover investors. They're investing not only in these large
satellite constellations but also in the launch vehicles that
will provide--you know, provide access to these constellations.
So I think that's probably the biggest difference right now
from what we saw in the past, and it's the tremendous need for
big data--data, data, I'm sorry. But there's a tremendous need
there for internet access, as well as, you know, remote sensing
needs, the satellite communication needs. So as our appetite
for this grows larger, I think you're going to see the need for
these larger constellations.
Mr. Pulham. I would agree with Mr. Stallmer's comments. I
think, you know, a couple other things are at play. The large
constellations that have been proposed in the '90s were really
about building telecom backhaul and video backhaul, and today,
we're in a world of much more directed consumer use of the
satellites and their data. If you look at the largest category
of commercial satellite activity, it is direct-home
broadcasting followed by GPS, which is direct to consumer.
Everybody that's got one of these a little iPhones or whatever
you're carrying, you've got a satellite ground station that
you're carrying in your pocket.
I think the other really interesting difference to me that
is somewhat about the money is the degree to which there is
great synergy now between the technical and innovation focus of
Silicon Valley and the people who are innovating in space and
contributing to these startups in space. If you look at, you
know, what's going on with SpaceX, well, you know, they know a
thing or two about Silicon Valley; they have connections there.
And there's this whole locus of people who are equally
interested and equally financially invested in these markets
that begin to integrate themselves.
And so I think you have a more directly relevant set of
investors that is much better financially equipped than the
last time around and with a business model that is much more
sustainable.
Mr. Veasey. And the next question I wanted to ask both of
you again is on the Indian launch vehicles. What are the
critical factors that are leading U.S. commercial satellite
operators to seek waivers to the U.S. policy on launching
satellites on Indian launch vehicles?
Mr. Stallmer. The challenge right now is that the satellite
manufacturers are making satellites at a quicker rate right now
than we have the launch capability. So a satellite is not
making money as--while it's sitting on the ground. Currently,
the PSLV launch vehicle, the Indian launch vehicle, PSLV, has a
sweet spot and it has the capability of launching some of these
satellites right now in a timely manner.
We don't want to see U.S. launches going overseas by any
means, whether it's to India, Russia, or whomever else, but
right now from the satellite, you know, producers and
manufacturers, they need to get their assets up in the sky as
quick as possible.
I think this policy with the waivers and the review is a
sound policy. I think it needs to be in place. I think we
should be--you know, should stringently look at every launch
that is taking place on every vehicle--or every payload that
we're putting up on an Indian vehicle. But I think it really
needs to be evaluated, and I think--as the Congressman said
earlier, time will tell on this. We hope to phase this out as
the new generation of launch vehicles come online.
And in addition to that, a lot of these payloads that are
being launched on these Indian vehicles are only one-off
prototypes because as they're being launched, they're not being
launched in a dedicated orbit. They're being launched with the
orbit that it's putting on. So it's mainly the prototypes of
these vehicle--these payloads.
Mr. Veasey. Mr. Chairman, I yield back. Thank you.
Chairman Babin. Yes, sir. Thank you, Mr. Veasey.
I'd like to call on the gentleman from Florida, Mr. Posey.
Mr. Posey. Thank you very much, Mr. Chairman.
We got a lot of discussion but still a relatively small
amount of information about the engines themselves. I'd like
each one of you to just SWAG what you think each one of these
engines would be worth on the market.
Mr. Stallmer. It's hard to say, but I would say if you were
trying to launch that payload or that class of payload, whether
it's 1,200 pounds or--1,200 kilograms or 1,500 kilograms, what
would it cost on a commercial variant of that vehicle? And I'm
guessing that that variant would probably be in the $30 million
neighborhood. I think--the motors would be about in the $30
million vehicle.
Mr. Posey. Okay.
Mr. Stallmer. The motors would cost about $30 million, I
believe.
Mr. Posey. Each?
Mr. Stallmer. So--each.
Mr. Posey. Okay.
Mr. Stallmer. But I think certainly if you go forward, a
detailed cost analysis would have to be in place to see what
the actual cost is, what the government cost, what they should
be charging, things of that nature.
Mr. Posey. Yes.
Mr. Pulham. Votes, okay. Congressman, thank you for the
question. I would associate myself with Eric's remarks in terms
of the detailed cost analysis being required. We don't like to
speculate, and if we were asked the question and had time to
answer, I would task my research experts in talking with the
Air Force about what they're willing to sell for, talking with
companies about what they're willing to pay to try and come
back with some kind of a figure. I just have no idea at this
time.
Mr. Posey. Well, I--you know, it is so hard on the Hill to
get a yes or no answer out of anybody, much less a good guess
at a value. And I really do appreciate you SWAG-ing that for
me, and it just gets us in the ballpark.
Would either one of you care to comment on the percentage
of cost of the launch vehicle, the engine is? So if you have
one of these engines, do you have 50 percent of your program
ready to go, 33, 25? What do you think?
Mr. Pulham. Again, Congressman, it's an interesting
question because each of these vehicles has different
attributes. If you look at what Virgin Galactic is doing with
LauncherOne, their entire first stage is an aircraft, and so
their model is fundamentally different. So I just--you know, it
would be different for virtually every launch vehicle, I think.
Mr. Stallmer. I think in the category of launch vehicles
we're talking about, though, I think it is significant. It is
the motor. I mean, you certainly need the guidance systems and
the payload fairings and everything else, but certainly you
build a rocket around the engine, the motors.
But I'm not an engineer. I'm a poli-sci guy, so I would
stick to the experts on that. But if you're asking me for a
WAG, I would say it's a significant portion of the rocket on
this type of----
Mr. Posey. Well, you know, I'm figuring that they would
probably like to have the whole rocket. You know, what would
the payload be on one of the ICBMs that we're talking about
accessing?
Mr. Stallmer. The size of the payloads?
Mr. Posey. Yes. The weight of the payload.
Mr. Stallmer. I believe that the payload range is anywhere
from 500 kilograms to about 1,500 kilograms. And I think that's
a rough estimate because it falls in the medium-sized payload
area. It's--you know, whereas a Falcon 9 is a little bit
larger. Falcon 9 Heavy is extremely larger. What Virgin
Galactic and Firefly looking at are smaller payload and the
less than, you know, 500 kilogram payload, maybe about 300
kilogram payloads.
Mr. Posey. Yes. So the question is if I could just buy one
of the ICBMs, you know, take out the current payload, now I own
it, what would the market demand be for the 500 to 1,500 range
payload?
Mr. Stallmer. Well, that's the challenge. It could--the
market demand is high for that depending on how you use that
payload or that rocket. So, for instance, just recently--I
don't have the exact date--but a few months ago, SpaceX
launched the ORBCOMM constellation of satellites, and they
basically bundled, I believe, 11 satellites and then they
dispensed the satellites out.
So if you aggregate the payloads, it ranges. If you're just
looking for--you know, to use this launch vehicle for one
payload, a 1,000 kilogram payload, then there you go. There may
be a market for that. I'm not sure of what that mid-class
market is, but I know mostly what we're talking about now--and
when you're talking about a much larger market, you're talking
about the geostationary market, which is a lot--or it's a very
stable--we know almost exactly what that will be and who will
be launching it.
With these smaller satellites that are going up, these
smaller constellations--and I have a graph I could share with
you and the breakdown of the weight and the----
Mr. Posey. That's one of the talking points. I like that.
Mr. Stallmer. Yes.
Mr. Posey. And I was thinking like OneWeb.
Mr. Stallmer. So what OneWeb is looking to do right now--
and they have already aligned--of their 700 launches, they are
going to go with an Ariane space launch vehicle, as well as
augment some of these smaller aggregation with Virgin Galactic.
So the Virgin Galactic will maybe launch, you know, several--a
handful of satellites at a time where the Ariane variant can
launch a much larger amount because it's a larger payload. And
I think Elliott has a chart on that.
Mr. Pulham. Yes, Congressman. In my testimony there's a
chart from our research folks that shows from 2006 to 2015 the
breakdown of various masses that were launched. And in the area
that we're talking about, the medium 501 to 1,500 kilograms in
2014, just eyeballing it, it looks like it was probably about
13 or 14 percent of what was launched, and in 2015, probably
only about nine or 10 percent.
Mr. Posey. Okay. Thank you very much.
Chairman Babin. Thank you.
I'd like to recognize the gentleman from California, Mr.
Rohrabacher.
Mr. Rohrabacher. Well, thank you very much, Mr. Chairman.
Actually, is it okay----
Chairman Babin. No----
Mr. Rohrabacher. All right.
Chairman Babin. --he's passing his time----
Mr. Rohrabacher. All right. Oh, my gosh.
Chairman Babin. --so you're going next.
Mr. Rohrabacher. Well, he usually refutes me after I--no,
thank you very much, Mr. Chairman. This--you know, we have
perplexing issues here in Washington, D.C., and this is one of
the perplexing issues because we know that one of our great
assets is this new and thriving and futuristic space
transportation systems that we have now being developed in the
private sector.
And at the same time have made a lot of investments when
they were needed during the Cold War, et cetera, in rocket
missile technologies that are--there waiting and then what to
do with them in a way that would not undermine these people
who--not changing the rules in the middle of the game for this
people who now have invested in this new industry.
So let me suggest that it is not an unsolvable formula that
we're looking for. We know, and it's a pretty well--it is
pretty well understood that the government does have a right to
do launches on these ICBMs for government purposes, for a
government mission, is that correct? I mean, we're not saying--
the private sector isn't saying no, they've got to go with the
private companies even though the government has the capability
of doing it itself, is that correct? That's pretty well----
Mr. Pulham. That's correct.
Mr. Rohrabacher. Okay. Well, then the problem then--let me
just suggest that the government--maybe we're under--or not
looking close enough to see that there are things that the
government needs to do in space that will help alleviate this
problem. For example, if you have a certain number of space
vehicles that are there like ICBMs and waiting, well, we didn't
build them because we wanted them to drop nuclear weapons on
the Soviet Union. That's not why we built those. We built those
just in case there was a war, but we didn't want that to
happen.
Well, there are lots of things we need to do in space that
would also mean that we have to have this capability. How about
cleaning space debris? How about making sure that we have a new
commitment to making sure--and that would be a federal
commitment, and that these rockets will be used for things like
that? Or how about global protection against meteorites or
asteroids that might come and destroy the planet if we don't
have the capability of dealing with that? Those are--you know,
we have things we can do--that the Federal Government has to do
and has to be part of.
If we don't clean up the space debris, we're not going to
be able to do this business in space. It will undermine the
private sector anyway. So we need to do that, and it needs to
be done by the Federal Government. It needs to be a federal
program. And so maybe we can dedicate these ICBMs to missions
like that and--rather than trying to undermine our people in
the private sector who have invested huge amounts of money in
order to build this capability without thinking their federal--
the Federal Government was going to change rules of the game
and undermine their efforts to operate in the market.
So, anyway, that's just a thought. The bottom line is we
need innovative technologies, but I think what we need, Mr.
Chairman, is not just innovative technologies, but we need
innovative policies and perhaps expanding the role and getting
the job done that we need to get done in space, and focusing on
that may help us overcome this perplexing issue that we're
discussing today.
And you've got about a half-a-minute to say yes or no.
Mr. Pulham. Space debris is a huge issue, and I never
thought I would see a time when the commercial industry would
be anxious to try and find ways to regulate itself because of
the environment up there. We are starting to talk about space
traffic management, which has been an off-subject thing in
recent years. You know, absolutely space debris is a huge
issue, and anything we can do to tackle it is something we need
to do.
Mr. Rohrabacher. Even with the old ICBMs might play a role?
Mr. Pulham. If they can play a role, let them play a role.
Mr. Stallmer. I would say no on the ICBMs because China had
a satellite that they justified that there was a dead satellite
and they wanted to take it out of that orbit, and they used an
ICBM as an ASAT weapon. And as we were tracking--the U.S.
tracks over 20,000 pieces of debris because of this China ASAT
that took place by shooting a piece of debris. It caused about
5,000 pieces of debris.
So that would not be the best way, I would say, to use
this, but I think the focus the Air Force's technology on space
traffic management and if there's a way to use these vehicles
in that regard, I'd be for it.
Mr. Rohrabacher. Yes. I think the suggestion wasn't that
the ICBM----
Mr. Stallmer. Right. Right.
Mr. Rohrabacher. That's your debris.
Mr. Stallmer. Right. Right.
Mr. Rohrabacher. Yes, you weren't proposing to blow these
things out of the----
Mr. Stallmer. Not one for one. Not one for one.
Mr. Rohrabacher. Yes, but we might have some big machine
that we put up there----
Mr. Stallmer. That's right.
Mr. Rohrabacher. --that could actually----
Mr. Stallmer. If we could do that, I would be all for that,
sir.
Mr. Rohrabacher. Okay. Thanks very much, Mr. Chair.
Chairman Babin. You're welcome. Thank you, good line of
questioning.
Let's see. Now, the gentleman from Colorado, Mr.
Perlmutter.
Mr. Perlmutter. Thanks, Mr. Chair.
And Mr. Rohrabacher and I often disagree, but a lot of
times we agree, and he and I are on the same page when it comes
to creating some kind of formula that both encourages private
development of launch systems to carry, you know, smaller
satellites to really maximize the private endeavors here but
also maximize the investments that taxpayers have made, whether
they're from Colorado or California or any place else in the
Nation with all of these ICBMs.
So I think there will be a formula that will do both of
those things. And, you know--and I agree we want to use the
ICBM not to blow something up, up there but to maybe be the
vehicle that----
Mr. Pulham. Certainly.
Mr. Perlmutter. --you know, has the snowplow cleaning up
the junk up there.
So, you know, one of the things I want to see encouraged,
and I think we're seeing this development, is with the small
satellites, the CubeSats, the microsats, whatever you call
them, to be able to have some kind of a launch system that
really is dedicated to them. And so that, you know, whether
it's some private--small private enterprise that's building the
satellite or whether it's, you know, a university developing
the technology to go on a small satellite, I mean, I came in
late and my guess is you gentlemen already answered this, but
are those launch systems being developed? Is there something
else we as a Congress can do to spur their development? And
I'll turn it over to whoever wants to go first.
Mr. Pulham. Thank you, Congressman, and I appreciate you
being here and would invite you to see some satellite payloads
being deployed from Fort Carson the summer. We are involved
with the United Launch Alliance on a program called Future
Heavy where we're going to be launching the world's largest
amateur rocket from Fort Carson and deploying about a dozen
student experiments that are all in the CubeSat sort of range.
So I hope you can join us for that.
I think that, as my colleague has suggested, that
development is going very, very well, and so what we need to
focus our efforts on is how to be--to not perturb, I guess, the
environment by acting without really, really thinking things
through. I think that the--a lot of the launch companies have
great, innovative ideas. The architectures that they're
introducing are very interesting, and they're working with lots
of different spaceports, which is going to give people a
tremendous variety of options.
So I think we're headed on a really good path. We've got a
lot of private investment pouring in, and so I would say just
let's not throw the baby out with the bathwater.
Mr. Stallmer. I would concur with Elliott on that. The
process right now is working. We have at least four or five
small satellite launch vehicles in development right now that
should be coming online within the next year or so. I think any
change in this policy again could be very disruptive to that
process. A lot of this--you know, what you don't want is these
companies coming to you for, you know, a handout or, you know,
additional funding. They're doing it by themselves by private
sector investment right now. And if we stunt that private
sector investment growth, we're going to have a large--you
know, a much greater problem.
So I think we're doing the right thing in that regard. And
even if the policy had--would change, you change it tomorrow,
it would take at least a year to 24 months to transition these
motors into vehicles, I believe, maybe a year, but maybe more.
So I think that's a challenge that we have.
But I'm all for--you know, as a taxpayer, as someone who's
served in the military for 25 years, I see the investment that
these had and I think if there's a way that we can think
creatively on how to use these missiles for not their intended
purposes, I think it's ideal. And I'd like to come to--come
forward with a solution--try to find a solution to that.
Mr. Perlmutter. Okay. So, I mean, I'm happy if you're
telling me just let it develop on its own, that there really
isn't any major need for us to do something, that's fine with
me. I do want to see us not pass up the opportunity to put the
ICBMs to work in some positive fashion. I guess I'm not afraid
of India as being, you know, a launch country for some of our
small satellites. So I'm happy just to be hands-off. But I also
have a responsibility as a Member of Congress to make sure that
the assets of the United States are used properly and not just
thrown away.
Mr. Stallmer. I certainly see your concern there from the
taxpayer perspective, and it's greatly appreciated. But
sometimes the hands-off approach also is appreciated in
industry. If you see--and sometimes, you need a little hand
from the government and a pat on the back, but I think if you
see the progress that the commercial sector has made just in
the last week alone or last two weeks what Blue Origin has done
out in West Texas on improving their reusability, what SpaceX
did with the commercial cargo launch, they launched not only a
cargo to the International Space Station, they put in their
trunk an inflatable module made by a commercial company Bigelow
Aerospace that attached to the International Space Station that
was built--the delivery system was built by Sierra Nevada from
Colorado, and all the different commercial players that were
involved in that and launched from Space Florida. So there's a
lot of tremendous growth going on in the commercial
marketplace.
Mr. Perlmutter. I have one last question if I could, Mr.
Chair. So when I walked in, I wasn't quite sure if I heard this
correctly, but did you say that these companies should get
their assets up into space as soon as possible? Is that what
you said, assets, I hope?
Mr. Stallmer. I think, yes, the companies--and I think
collectively as a nation we should get our other assets----
Mr. Perlmutter. Get our assets up into space? All right.
Thank you. I yield back.
Chairman Babin. Yes, sir. Thank you. And I'd like to call--
--
Mr. Stallmer. My mother might be watching, so I'll be
careful.
Chairman Babin. I'd like to call on the gentlewoman from
Virginia, Mrs. Comstock.
Mrs. Comstock. Thank you, Mr. Chairman.
It's hard to have a discussion about commercial space and
not mention Virginia's Mid-Atlantic Regional Spaceport at NASA
Wallops, which is one of only four launch sites in the entire
United States that is capable of launching to orbit. It has
served as a vital asset in support of our nation's space
industry. So there has been discussion on the commercial use of
decommissioned ICBM motors, and I wanted to ask how potential
use of these motors could benefit our nation's spaceports,
including MARS?
Mr. Stallmer. Well, we represent MARS and the great people
at the Mid-Atlantic Regional Spaceport. Dale Nash is doing a
fantastic job down there, and I think it's a vital asset to the
U.S. spaceports, and we are tremendously supportive of what he
does. And I also should say, Congresswoman, tremendously
supportive of what you do for McLean Little League and your
support.
Mrs. Comstock. Thank you.
Mr. Stallmer. You know, I have three children that are
quite heavily----
Mrs. Comstock. That was a great----
Mr. Stallmer. --involved.
Mrs. Comstock. We just had our kickoff on Little League,
and Jayson Werth threw out the first pitch, so that was fun,
too, right?
Mr. Stallmer. I heard he was only going to be there because
he knew you were going to be there so----
Mrs. Comstock. Oh, yes.
Mr. Stallmer. But, no, the spaceports are vital to the
economic growth of our industry. It's a total ecosystem of what
we're dealing with. Without these state-of-the-art reliable
spaceports, we're not going to have the vehicles that we can
put up into space and all the tremendous benefits that we're
going to get to space. So to say we support Mars, it would be
an understatement because I think, as I say, a vital asset.
I guess our thinking would be--and they have a great
partnership with Orbital ATK, another fantastic company, whose
right in the middle of this issue, and we want to see Orbital
be launching as many vehicles as they can from MARS and from
the other spaceports.
We see the value, though, without these ICBMs, that there's
potential of launching even more vehicles from those spaceports
and that spaceport in particular. However, I think if the
government intercedes and cuts into the competitiveness of the
commercial marketplace, as we've seen in the past, it can have
a really damaging impact on the industry as a whole. So instead
of launching one or two vehicles from the spaceport per year,
you can go either way. It could be we launch several or
launching a few, and I think that's what we really need to
examine. But tremendously supportive of the Virginia spaceport.
Mrs. Comstock. All right. Thank you.
And thank you, Mr. Chairman.
Chairman Babin. You're welcome. Thank you.
I think at this time we'd like to go back through for a
second round of questions if that's amenable with everyone.
I recognize myself for the first one.
Under the 1998 Commercial Space Act the Federal Government
can use excess ICBMs for its own use as long as certain
conditions are met. We've heard that numerous times today. This
provision was utilized by NASA for the LADEE mission. We've
recently heard that the procurement for this mission was
particularly onerous and resulted in a protracted protest to
the GAO. As a result, we've heard NASA is hesitant to use
excess ICBM motors on future missions despite being able to do
so. What can the Congress do to make it easier for agencies to
utilize existing authorities to use these access ICBMs for
governmental purposes? Both of you.
Mr. Pulham. Mr. Chairman, I think you cut right into the
Armed Services Committee here. The issue, I think, is the
difficulty of the contracting environment as regards federal
defense and space procurements these days. There's very rarely
anymore a procurement that doesn't end up in court or appealed
or challenged or protested or whatever can be done. And so, you
know, I think that the issue is not one that's particular to
launch vehicles of any kind. I think it's systemic within
federal contracting and needs to be the subject of contracting
reform discussions.
Chairman Babin. Mr. Stallmer?
Mr. Stallmer. And I think a lot of this discussion, you
know, when we go through the research and the waiver process to
launch in these vehicles, a lot of this policy is the
discussion on the potential of what if a launch failure
happened at one of these ICBMs? I think that is a discussion
and what this could mean to the nuclear triad. I think that was
where a lot of the area of pause came from and the implication
and the integrity of our ICBM arsenal.
So I think there's a lot of broader policy implications
involved with this. Certainly, the discussion with Congress on
how we can streamline these processes would be helpful in that
regard because, again, the national policy does state that
these assets can be used for defense and other government
missions and just--they--you know, they need to go through that
process. So I think it needs to be a thoughtful discussion
involved on that.
Chairman Babin. Okay. Thank you.
And then, again, General Hyten, Commander of Air Force
Space Command, stated in the ``Financial Times'' yesterday that
a growing number of commercial launch ventures made him worry
whether there was enough business to sustain them all, noting a
similar bubble in the late 1990s that burst when commercial
satellite constellations went bankrupt. Is the recent
prosperity of the small satellite market a result of
technological advances such as Moore's law and spin-in from the
technology sector, or is it a reflection of a short-term bubble
in launch services brought about by government subsidies?
Mr. Pulham. Thank you, Mr. Chairman.
I certainly don't think it's because of government
subsidies. I think that you're seeing different success in
different sectors of the space industry, and that drives itself
into the various types of satellites that are being launched.
In the case of the very small satellites, it's really been
the development of microelectronics and the compression of
processors and, you know, the availability of nanotechnology
that is allowing these small satellites to be produced almost
as a commodity. They're coming off an assembly line and
students are putting them together, and it's not the kind of
intense clean-room operation that major satellites are
contending with.
At the same time, the companies that have orbital slots
where they're able to put very high-value satellites in
geostationary orbit, they're not shrinking those satellites.
They're putting more and more capability into them and more and
more capability to stay in orbit longer. And because the longer
a commercial satellite is functioning, the more revenue they're
able to see from it.
And so you're seeing investment from the commercial
operators in things like research that will help them with
satellite servicing. And I think it was Intelsat that just
inked an agreement with somebody to do a----
Mr. Stallmer. With Orbital ATK.
Mr. Pulham. With Orbital ATK to do a demonstration of
satellite servicing.
So you have different types of investment being made in
different sectors of the industry. You do have--you know, the
launch business is interesting. It really only comprises about
2 to 2-1/2 percent of the total space marketplace globally, but
that 2-1/2 percent works out to, you know, about $3 billion or
so, so that's not--$6 billion, so that's not chump change if
you want to be in that business.
So there is a market for each of these things, and I think,
you know, we need to trust the companies that have business
plans and business models to go after each of the segments and
to do so knowing that some are going to succeed and some are
going to fail. But I think we're at a point in the maturity of
technology and the maturity of the industry and the depth of
financial strength behind these that we're going to see more
successes than failures as we go forward.
Mr. Stallmer. I would say in all due respect to General
Hyten that I would gauge the forecast of the commercial
marketplace more from the commercial marketplace rather than
from the Air Force, as well as through a lot of the
organizations that are doing these forecasts in tremendous
detail, you know, for instance, the Tauri Group on their annual
forecast of what venture startup looks like and on what the
Space Angels Network is seeing, as well as the FAA's forecasts,
annual forecasts of what they see for these markets.
The way Silicon Valley has invested in these companies I
think--as I said, there's a lot of crossover investors that
have also invested not only in the satellite systems, but also
in the vehicles that are producing these.
So I certainly applaud General Hyten's passion on this
issue, but I think unless they have reports that I haven't
seen, these forecast reports on the commercial marketplace, I
would kind of look forward to more of what the commercial
forecasts are looking at.
Chairman Babin. Okay. Thank you.
Yes, sir?
Mr. Pulham. And if I can add, we talked a lot about Silicon
Valley investments and angel investors here. I think one of the
hallmarks of where we are today is that the investment is not
just coming from high-risk-tolerant people, that a lot of the
times when you see an investment made in a space company,
you'll see a Silicon Valley company sort of as a lead or a
face, but it'll be somebody very institutional like Fidelity
Investments or one of the big banks back in New York that is
putting a huge equity put into that because they see profits
and they see progress being made in other parts of the sector.
They see what is being accomplished, and their confidence to
invest as institutional investors is quite strong.
So that again takes it out of the realm of where we were
back when we had things like Teledesic when you were, you know,
just depending on somebody's personal, individual wealth, but
you're able to appeal to large financial institutions.
Chairman Babin. Thank you. Thank you very much.
Now, I'd like to recognize the gentleman from Colorado one
more time, Mr. Perlmutter.
Mr. Perlmutter. Thanks, Mr. Chair.
And, you know, obviously, this is a frontier, but with all
frontiers, there's lots of opportunity and there is risk. And
to the degree there are failures, you know, I spent my life
before I was elected to Congress as a Chapter 11 lawyer, you
know, so that's just the nature of private enterprise. And the
fact is that more companies, more individuals are willing to
see this frontier for the opportunities that it presents. And
if we have some mistakes or some things don't go, then that's
the way it is.
Now, I have a couple questions. Mr. Pulham, deploying small
satellites from the space station using a commercial dispenser
is perhaps the most accessible onramp for new entrants to
space. What is the importance of this asset for educational
institutions and space research?
Mr. Pulham. Thank you, Congressman. It's very important,
and we're pleased to work with the folks at CASIS in Florida on
a number of programs appealing to students. But it is one of
the largest users of these small satellites is for universities
and student research because they don't have access to the big
national labs and platforms. And so the ability to go someplace
like CASIS, manifest your payload, and have it ejected from a
dispenser, which I'm--it sounds like we're all eating PEZ here,
but it works and it's a very good approach.
And what we're seeing is that other companies that have
other solutions are also beginning to think about sort of the
philanthropic part of this, yes, we're going to put up a
vehicle and we've got room for five small satellites. Why don't
we dedicate one of those to a university project?
So the International Space Station continues to be a
profound investment that pays off for this country every single
day, and the ability to deploy small satellites is just one of
many, many things the ISS has given us.
Mr. Perlmutter. Okay. Anything to add?
Mr. Stallmer. I absolutely, completely concur. I mean, the
value of the ISS is innumerable to speak of, and it is
absolutely a great onramp for a lot of the type of payloads
that are being launched from it.
As we move forward, I know a lot of these satellite
payloads want to be--get in their dedicated orbit that would be
optimal for their use, and--whereas ISS you go out where they
ship you out. So--but it is just an outstanding resource and
the work, you know, that CASIS is doing is fantastic and, you
know, the companies like NanoRacks that help support this, it's
great.
Mr. Perlmutter. Similar to a question and discussion we had
with my last round of questions, so this year, we found
ourselves talking at length about how to transition from the
Obama Administration to the next President. These conversations
will likely carry over after this year. What advice do you
gentlemen have to our committee and the incoming
Administration, whoever it is, to support the growing
commercial space industry?
Mr. Pulham. So, Congressman, thank you. In my introductory
remarks I asked to have included a white paper that our two
organizations and 12 others worked on called ``Ensuring U.S.
Leadership in Space.'' And that paper was written particularly
to present an industry consensus on exactly this issue for
people that are running for office, both those that have and
those that have not space experience. I think this committee is
very rich in that you have a lot of people here who have this
experience and can share that with other members.
The--you know, the enemy that seems to gnaw at space
programs in the United States is the enemy of transition from
one Administration to another. And I know this plays out in a
lot of different parts of the space community, but certainly
where we see it the most visible is in NASA where it seems like
every new Administration wants to put their thumbprint on the
program, and we stop and throw away billions of dollars worth
of effort and start all over again.
Starts and stops and redos are killing us, and we have to
get to a position of consistency. And many of these
recommendations that we've made in the past are now in
Congressman Bridenstine's bill that he announced last week.
And so things that give NASA and others in the space
business the opportunity to do multiyear procurements, no-year
procurements, stability and leadership, it's a highly technical
enterprise, and it shouldn't be subject to political--high
political turnover, and just the long-term vision of what are
we intending with our space industry? We have good space
policies----
Mr. Perlmutter. I'm going to stop you for one second----
Mr. Pulham. Please.
Mr. Perlmutter. --just to put in a plug for something I'm
pushing, which is the orbital mechanical engineers say 2033 is
the best time to get our astronauts on Mars because that's when
we're closest, it saves a lot of travel time, and so my goal is
to make sure we have something from a Congressional standpoint
suggesting to the Administrations as they come and go, let's
get our astronauts to Mars at least by 2033 if not before then.
And so you're absolutely right, a lot of starts, a lot of
stops. We need continuity of mission. We need not to start
engaging in things if the private sector is actually working
its way through all of this. So 2033, just remember that date,
and then, Mr. Stallmer, if you had something you wanted to add,
go for it.
Mr. Stallmer. I think Elliott did a great job covering it.
I would say for the private sector and, you know, the civil
and military space, their goals should be to do--in regards to
civil and military space--do what the commercial sector cannot
do. The commercial--and I'm going to tell you all the great
things that are going on in the commercial marketplace. But
there is still fundamental science and technology that only the
government has that competency and capability of doing.
So, you know, I know firsthand your staff and all the staff
here has always been engaged with our member--myself and our
member companies on knowing what our capabilities are and what
our aspirations are and what our limitations are. And I think
we'll always be honest with you. And I think as we move
forward, you know, from whatever new Administration it is going
to be, is that NASA has core competencies that they're very
good at, as does the DOD. And you've got to keep in mind that
the commercial marketplace would be there to help throughout
the way.
Mr. Perlmutter. Thank you. Thanks, Mr. Chair.
Chairman Babin. Yes, sir. Thank you.
And now, I'd like to recognize the gentleman from Florida,
Mr. Posey.
Mr. Posey. Thank you, Mr. Chairman.
I'm still trying to quantify the potential values and
potential uses of our potentially expendable ICBMs. Is there
anyone in the industry who uses the same motor now?
Mr. Stallmer. I do not believe so. I believe that Orbital
ATK is the subject matter expert on solid rocket motors. I
could be corrected on that. But by and large, the majority of
folks in the launch industry use liquid motors, so Orbital is
the one--Orbital ATK are that. And again, I'll check for
clarification, but I believe--if they aren't, there's not that
many others.
Mr. Posey. Okay.
Mr. Stallmer. I believe they are the only one.
Mr. Posey. And I was interested really in domestic because
I don't want them to go overseas----
Mr. Stallmer. Right. Right. Yes, of course.
Mr. Posey. --by any stretch of the imagination.
A little while ago, you talked about the United States
having 100 percent of the commercial launch market back in the
'80s, and then I missed the last part of that sentence. We
managed to parlay it into what?
Mr. Stallmer. So the United States changed their policy.
The United States and--you know, the commercial launches, and
then we changed the policy to go onto the shuttle. And then
after the shuttle happened, during that time frame, lot of--
Ariane space emerged to take up a lot of those commercial
launches because of the limitations that the U.S. launch
companies had. So the U.S. Government was still launching--or
we still were launching government payloads, but as far as
commercial geostationary satellites, were at zero.
And that has recently changed, I think, with the emergence
of SpaceX. I think in 2010 we started beginning to capture a
larger amount of the market share, and right now, I believe--
correct me if I'm wrong, but I believe that we have 60 percent
of the geostationary commercial marketplace.
Mr. Posey. Okay. Yes. My recollection is a little bit
differently. I think we lost the commercial market because we
overregulated it while other companies subsidized and actually
helped their industries. We choked the golden goose. And I
think we managed to do that. I don't think there was ever a
necessity for an Ariane if they had left our commercial launch
vehicles alone and let them do their job without trying to fund
federal agencies with what should have been value-added--or
actually were non-value-added cost to our commercial launch
market.
Thank you, Mr. Chairman. I yield back.
Chairman Babin. Okay. Well, I think this pretty much wraps
up the questioning for today. And I'd like to thank the
witnesses very much for being here. And I know there were some
other folks that wanted to come back, but I think they had
other meetings.
So I guess the record will remain open for the two weeks
for additional written comments and written questions from
members who did not get to get back and ask their questions.
So thank you again, witnesses. We appreciate it. This
hearing is now adjourned.
[Whereupon, at 11:22 a.m., the Committee was adjourned.]
Appendix I
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Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
Responses by Mr. Elliot Pulham
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Responses by Mr. Eric Stallmer
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Appendix II
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Additional Material for the Record
Statement submitted by the Full Committee
Ranking Member Eddie Bernice Johnson
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