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pects "payload effects"-the growth of payloads to larger size, payload standardization, in-orbit checkout, in-orbit refurbishment, return of payloads and products, and revisits of payloads such as the space telescope. The commercial sector to date has not availed itself of these growth capabilities even for current technology communications satellites because multibillion dollar developments cannot be made relying solely on one transportation system-with four vehicles at that. A shuttle equivalent backup at least to LEO is necessary before one will see the expansion of the commercial sector to make full use of the space shuttle.

If launch assurance (by expendable backups) is not given by the U.S. market, invariably the Arianespace vehicles of the Europeans will become the de facto backup system to the U.S. STS; Arianespace may become in many cases the primary system with the shuttle serving only as a backup to commercial users in world markets.


The choice of a commercial backup for the space shuttle clearly has a variety of U.S. systems to choose from, among them the Delta System, the Atlas/Centaur system possibly upgraded to accomplish Intelsat VI, HS393 and some direct broadcast satellite applications—and the Titan system. Such competition will have to consider the following:

Any U.S. ELV system has to be competitive in world markets with other expendable launch systems as long as such other systems are not subsidized outright.

The U.S. ELV should be capable of providing complete backup to the space shuttle system in terms of payload mass, volume, and launch environment.

Any commercial ELV will be less advantageous than projected shuttle launch prices from 1986-88 based on user charges of $71 million per shuttle flight (1982 dollars). However, a commercial ELV may put an "upper ceiling" on likely future space shuttle user charge increases in 1986 to 1988 and certainly beyond 1988.

Ideally, a U.S. ELV will provide the Air Force with a continued expendable backup option to the space shuttle system, possibly well into the 1990's, without imposing large payload modification costs on the Air Force for the use of such ELV's. Commercial ELV ventures will allow NASA to phase out future government funding of all expendable launch vehicle systems.

The U.S. Government should not stand in the way of an early, efficient commercialization of U.S. ELV's to meet foreign competition on equal ground. The U.S. Government, as part of this process, should not impose user charges on U.S. ELV's which are not imposed on either the space shuttle or by foreign ELV organizations. These include principally fees for existing government space facilities and services. The total market for U.S. launch services will be substantially larger when the STS is combined with commercial ELV's in this critical transition phase.

Commercial U.S. ELV's may substantially delay and discourage all foreign ELV competition in world markets.


Even if government funding for Orbiter V were feasible, we still submit that equivalent funds would be better invested by NASA in significant new technology initiatives than in building one more orbiter when this orbiter could be provided by the private sector.

Such new technology initiatives certainly ought to include (1) large space structures, (2) orbit transfer vehicles, (3) civil space applications, and (4) civil aeronautics initiatives. These initiatives will add to the U.S. technology base in the late 1980's and 1990's, whereas one more orbiter will not.

Important new technology initiatives might be "squeezed out," postponed or altogether foregone by Orbiter V funding has to come from the Federal Budget. On the other hand, the example set by NASA in private sector participation in a significant part of the U.S. space program may provide a powerful incentive to the Administration and Congress to proceed with significant new technology initiatives so that similar examples of commercial phaseover and success may be set in the future, based on these same principles.


Related to the question of whether to continue orbiter production capabilities or close the production lines is the question of the development and maintenance of the orbiter technology base: is a continuation of the current space shuttle design by acquisition of additional orbiters in the overall national interest or should the pro

duction of orbiters be frozen with the current number until initiating a second generation space shuttle.

Components in the current space shuttle design can be upgraded gradually, in an evolutionary shuttle technology program so as to make a "closing" of space shuttle production of the current design undesirable. The current shuttle design can be evolved gradually to a substantially improved space shuttle version by the mid1990's without a dramatic cut in production lines and a total redesign effort.

Substantial improvements are possible on individual components of the current space shuttle system, such as the external tanks, the solid rocket boosters (possibly to be replaced by pressure-fed systems), improvements in the thermal protection system-without a radical redesign of the shuttle vehicle. Included therein can be a gradual upgrading of engine performance and engine life. The active maintenance of an evolutionary space shuttle technology program would clearly be of great advantage to the nation. Not all of these improvements necessarily warrant the acquisition of an additional orbiter.

The advantages of procuring Orbiter V can be summarized as follows:
Insurance against catastrophic loss(es) of Orbiters I through IV.

Insurance against unforeseen operational difficulties affecting availability of specific orbiters or the orbiter fleet.

Assurance of a reasonable cost per flight in that the total cost added by Orbiter V to STS operations costs is not significant when compared to the ability of the fleet to accommodate all the traffic for STS on time.

Insurance against future demand growth for STS beyond the capacity of a fourorbiter fleet.

More cost effective operations from improvements in Orbiter V arising from earlier experience in the space shuttle flight program.

Assurance that all payloads scheduled to be launched on STS can be launched (65,000 pounds capability from the Eastern Test Range (ETR) and 40,000 pounds capacity from the Western Test Range (WTR), payload return capability, etc.).

Assurance of continued orbiter production capability into the late 1980's and 1990's.


The opportunity—and the status-for the United States in space enterprise are many and challenging. However, these opportunities are not realized if left to themselves without combining government and private enterprise, without government assuming leadership for new technolgoy space goals and without the common sector assuming its share to realize these opportunities in new space markets. This new direction cannot be left to the "Invisible hand." Clearly, a resolution of the mix of U.S. space transportation capabilities-Orbiter V and common ELV's-is needed. More important, U.S. space enterprise has to combine government and private initiatives in space applications and space transportation.

Whereas the 1950's and 1960's represented an era of enterprise, expansion, risktaking, and growth, the 1970's devolved as a decade of retrenchment, cutbacks, monetary illusion (created by inflation), limited risk-taking, and management by "stretch-out" rather than accomplishment. Funding of R&D has been cut back from over 3 percent of GNP in recent years, the reduction of 1 percent coming from cutbacks in federal funding of R&D and thus principally cutbacks in aerospace R&D. In short, whether by accident or design, we experienced a period of disinterested policy, the consequences of which now show up in the strategic balance and changing patterns in aerospace world trade.

At the heart of this retrenchment was the U.S. space program. The vast successes of the 1960's-in manned space flight, the space communications program, and space science-created a foundation for the decades to follow, but the 1970's saw a singular failure to capitalize on it. From an era of challenging space goals we wandered into indecision, confusion, lack of purpose, or imposed inactivity, mostly due to budgetary and fiscal constraints. Also the notion was held by technological Luddites (for want of a better term) that the federal budget deficit and all other societal issues can be solved by cutting back aerospace programs, such as Orbiter V.

The United States should have used its space technology base of the late 1960's by making its space program a principal component of its technological, economic, and foreign policies in the 1970's. For two principal reasons the United States has not done so:

NASA was not given a challenging new space goal and program for the 1980's to go-in parallel-with the space shuttle development. Space transportation systems

are means and not goals, and as such they have to be put to some broader purpose and use. This use was not defined in the 1970's.

The U.S. did not create a program to put its vast market forces in pursuit of opportunities to exploit space on a worldwide basis.

Both of these causes of failure have to be corrected.

What the precise U.S. space goal and program should be is currently under active consideration by the U.S. Government. From an economic perspective, clearly, the geosynchronous orbit holds the greatest promise: the information sector of the United States and worldwide will constitute a major part of economic activities in the 1990's. It is also the part where the United States still leads in space, and where the United States has the possibility of further significant breakthroughs with large space structure technologies-platforms-in low and geosynchronous earth orbits. Establishing a new U.S. space goal, especially for NASA, will not in itself bring about the full development of U.S. space program opportunities. We must restructure the very basis and mode of space operations and applications. We must bring about accountability in space programs, government and industry cooperation to the benefit of the U.S. economy, and the institutional setting to allow full private as well as government initiatives in pursuit of space opportunities.

The U.S. aerospace industry has been the most dynamic and innovative sector of U.S. industry in world markets, and is the largest contributor to net trade (exports minus imports): for every dollar of sales aerospace industry makes a net export contribution of more than 20 cents; and for every dollar of sales, aerospace spends 20 cents on research, development and testing (see Figure 6). This peformance leads by far any other sector of U.S. industry. [4, p. 22.] Aerospace industry has been for some time an example of successful government and industry cooperation. Let us continue this example in space matters.

At stake in world space markets are anywhere from $20-50 billion in commercial investments between now and 1995, about one-third of that are space transportation costs ($10 to 15 billion), one-third payload costs, and one-third are ground systems


Of this total commercial world market, about one-half may be open to competition by the United States and the other leading industrial regions (Europe, Japan). It is time for the United States to set up economic structures that will be able to compete in such markets. Europe has done so in Arianespace—a commercial entity.

A commercial approach is fundamental to the success of the United States in world space markets: Aerospace companies to date have done an outstanding job in world markets. The aerospace sector is the most successful segment of the United States in world trade. Nothing has happened to suggest that a govenment agency may do a better job than industry can provide. Hence, private institutions should be allowed-indeed encouraged to go forward and assume these functions.

In terms of space transportation this applies to the commercialization of expendable launch vehicles, as well as Orbiter V.

In the context of such a reaffirmation and redirection of the U.S. space effort the question of the need for-and the funding of-Orbiter V will become more obvious and may well be left to the marketplace.


(1) Ehrlichman, John, "Witness to Power: The Nixon Years," 1982. New York: Simon and Schuster.

(2) Heiss, Klaus P. and Oskar Morgenstern, "Factors for a Decision on a New Reusable Space Transportation System," Memorandum to Dr. James C. Fletcher, Administrator, National Aeronautics and Space Administration, October 28, 1971.

(3) Heiss, Klaus P. and Oskar Morgenstern, "Economic Analysis of the Space Shuttle System-Executive Summary," prepared for the National Aeronautics and Space Administration, Princeton, N.J., January 1972.

(4) Coopers & Lybrand, "Commercial STS Launch Demand 1983-2000," study prepared for the Space Transportation Company Inc., September 20, 1982.

(5) Aerospace Industries Association, "Research and Development-A Foundation for Innovation and Economic Growth"; Washington, D.C., September 1980. NOTE: References are noted in the text without footnotes; reference and page numbers appear in the text.

Senator TRIBLE. Thank you, Dr. Heiss. Thank you, gentlemen, for your testimony today.

Let me direct a question to the entire panel. And that question is very directly in your professional judgment: Should the U.S. Gov

ernment finance a fifth orbiter, possibly at the expense of new scientific and technological initiatives, or should a fifth orbiter be financed by commercial venture?

Dr. ROSEN. Mr. Chairman, the AIAA has taken a consistent position over the years that a fifth orbiter will be required. Our position this year is that there is no clear evidence that that commitment must be made in fiscal year 1984. There is clear evidence, however, that the subcontractors and vendors must be sustained through fiscal year 1984 at a rate which will allow us to make that commitment in the future. But we have seen no long-term change in our forecast for demand for Shuttle traffic which would lead us to change our position from that which we had previously stated, and that is that at least five orbiters will be required for the fleet. Senator TRIBLE. Would anyone else care to add to that?

Dr. HEISS. Well, I would think first the question ought to be answered from a national perspective: Do we need an orbiter now, a fifth one, or can that decision be delayed? The question of whether there is Government funding or private funding is really secondary to that question.

An important issue related to it is the commercialization of ELV's, which could probably take up some of the slack and uncertainty or growth expected in demand later on in this decade without having to lose these markets to foreign competition, without an orbiter V.

But the key question to ask I believe ought to go as follows: With $1 billion added to space activities, is the Nation better off if NASA funds one more orbiter or would NASA and the Nation be better off if that same billion from Government funds was spent on new initiatives, be it in aerospace technology, aeronautics, and in particular with regard to a new space goal, civil space goal, as against funding one more orbiter, if the private sector can fund orbiter V? And in that context alone, I think clearly we prefer private funding to Government funding of orbiter V.

Dr. YARYMOVYCH. There is a question of timeliness in order to retain the critical skills and the critical elements of the team. As we were saying, although a full commitment now to a fifth orbiter depends on further examination of the future, a full commitment now to keep the line open is nececessary.

And when we talk about now, we are talking about time periods of April or early summer of this year, 1983. If no funding is forthcomming, certain portions of the contractor team will be shut down and certain critical skills will have to be laid off and lost and to regain them later, should we change our minds that we after all do need this orbiter, will be very costly. So the question of whether the Government pays for it or the commercial enterprise pays for it is certainly a subsidiary question.

The next problem is how fast can a commercial enterprise get its funds together to support this program now?

Senator TRIBLE. You are testifying then that a decision must be made by the spring in order to keep the production line and support facilities and personnel and staff in place?

Dr. YARYMOVYCH. Well, it is a capability that would be eroding with time. Certain things are more critical than others that have to be kept on line earlier than others because they are going

through a phase-out as the fourth orbiter production is terminating.

Senator TRIBLE. Consistent with that observation, as we consider the decision to procure a fifth orbiter, the ability to build that orbiter diminishes with time. What is your view of the cost if we initiated, if we made the decision in fiscal year 1983 or if we made the decision in 1984 or in 1985? Are you in a position to address that question of cost?

Dr. ROSEN. Sir, let me say the AIAA is not in a position as a corporate body to address that issue. However, we are fortunate in that this year our president, Dr. Yarymovych, is intimately involved with the Shuttle program and is a vice president at Rockwell. I think in that capacity might be able to give you some data. Senator TRIBLE. We would be happy to accept your testimony wearing that hat.

Dr. YARYMOVYCH. Bear in mind that, of course, NASA is the final authority on cost figures, and we can only be approximate about these things. But I believe in the current budget projection of NASA there is a request for $100 million for the so-called structural and component spares to go into fiscal year 1984.

Now, that certainly will go a long way to retain critical skills, and we believe that is essential. A figure that we like to quote for fiscal year 1984 is $170 million, which retains a much larger complement of critical skills to maintain the ability to enter into a commitment for a fifth orbiter in fiscal year 1985, should that decision be made later.

Now, you may know that a full fifth orbiter go-ahead without just retention of skills per se, but a commitment to the orbiter is anywhere in the vicinity of $250 million in 1984.

Šenator TRIBLE. Thank you, sir.

Dr. HEISS. May I? I think one ought to distinguish between the vehicle cost of orbiter V on one side and the maintenance of production capability on the other. I think the vehicle cost of orbiter V is about $1 billion in 1982 dollars anytime basically. The big cost is to maintain production capability and that is very substantial. And they are in the context of whether orbiter V should be procured now or later.

There are probably two philosophies. One is a gradual evolutionary improvement of space transportation technology, and within that context orbiter V clearly is required at some point. And back in 1971 when NASA chose this orbiter it has specifically in mind such gradual improvement rather than to go through a fully reusable system in 1971.

The other philosophy would be as follows: Freeze the procurement of orbiters at four vehicles, see how it works and when it works fully, and then go to a new batch procurement of the next generation orbiter rather than the next generation, say, a derivative which would incorporate what we learned now and in the next few years.

And I do not know what the answer to those two questions is. Senator TRIBLE. Any other additions? Thank you, gentlemen. Let me ask you a further question. NASA has decided to phase out its expendable launch vehicles. Is there a justifiable concern that abandoning these ELV's and relying totally on a four-orbiter fleet

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