Space Travel for Fun and Profit

The private space industry soars higher by lowering its sights.

Katherine Mangu-Ward from the January 2007 issue

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Even without a totally refined message or perfect, snazzy graphics, a handful of wealthy people are ready to get suborbital. The recent, highly publicized trip to the space station by Anousheh Ansari, the entrepreneur who helped bankroll the X Prize, has kindled broad interest in personal space travel. Another female space-traveler-to-be, Reda Anderson, told NewSpace participants she didn’t need more reassurance or sales pitches; she preferred the rugged appeal of the young industry. “We’re not tourists here,” she said. “We’re not going to go up and spend time in a hotel and have a nice meal and all that kind of stuff.” The first breed of space tourists and entrepreneurs will be attracted, as one conference participant noted, by the fact that space is “fresh real estate, like the Internet,” room to grow and expand in an essentially lawless atmosphere (or, more precisely, no atmosphere at all).

But an industry cannot live off adventurers and libertarian dreams alone. Although the market is largely untested, a 2002 survey by the research group Futron found that interest levels were high enough to generate more than 15,000 suborbital tourists by 2021, assuming the price of a ticket comes down to about $25,000 (in 2006 dollars). The Federal Aviation Administration’s Office of Commercial Space Transportation put out a report last February estimating the space travel industry would be worth $1 billion a year within 20 years.

The industry is already talking about what’s next if and when suborbital jaunts become commonplace. Unlike NASA, commercial space companies answer directly to customer demand, so the dream of pushing on to the moon is strong. “That’s what people want—the moon,” says Bigelow with a grin. “But we’ve got a lot of steps before we get there. It doesn’t mean we’re not always thinking about it, though.”

Working for the Man
There’s the perennial problem of money, of course—of getting it to the right place at the right time, to ensure that the whole industry doesn’t turn out to be a collection of fizzled vanity projects. Bigelow says vaguely that he’s had some “serious interest” from customers for short stays in his space hotel, including various governments keen on sending up astronauts and scientists without the expense and hassle of running their own space programs. But Virgin Galactic has $10 million worth of “interest” in hand—in the form of down payments from future space tourists. Virgin spokesman Will Whitehorn has bragged about the company’s popularity and its cash on hand, saying, “I’m sure we will have sold out at least the first couple of years by the time we start flying.”

The company’s first commercial ship is expected to go up in 2008, and Branson says he intends to fly 500 people a year—the same number of people who have been to space in all of history. Perhaps with these confidence-inspiring figures in mind, Virgin inked a deal earlier this year to build a spaceport in New Mexico with some state funding on land set aside by the state for that purpose.

Virgin also has cleared a bureaucratic hurdle that many NewSpacers insist could still kill the newborn industry: the International Traffic in Arms Regulation (ITAR). The problem, oversimplified, is this: U.S. law limits the extent to which you can share technological information in any way related to defense with foreigners. This is understandable when it comes to new kinds of bombs or even snazzy night vision goggles. But it also could restrict the exchange of ideas about propulsion or guidance technologies for purely civilian use. Rick Tumlinson, co-founder of the Space Frontier Foundation and a sort of master of ceremonies at the Las Vegas conference, declared in one presentation: “As far as I am concerned, space ITAR is America’s new Iron Curtain. Mr. Bush, tear down that wall.”

The partnership between Virgin Galactic and the company that built SpaceShipOne managed to procure an exception to ITAR, though in a way that does not set a strong precedent. The victory came after five months of quiet legal spadework aimed at getting permission for the U.K.-based Virgin to use American SpaceShipOne technology for its commercial suborbital flights. As one attorney discussing the ITAR problem at a conference panel commented, “You should think of lawyers as your friends—your very expensive friends. We want to be part of the solution, not part of the problem.”

Meanwhile, the government continues to baffle the young industry by other means. In January 2004, when the White House released its plan to get Americans back to the moon and then on to Mars, even the most hard-bitten NASA cynics took heart in the Bush administration’s repeated suggestion that the space agency should contract with private companies for suborbital and orbital services. A mandate for the government to use private contractors where possible would be a serious shot in the arm for the industry. It would also reduce its independence, of course, and would elevate the preferences of government bureaucrats over the preferences of private consumers. Still, the possibility of extra cash was exciting, especially after NASA created the Commercial Orbital Transportation Services program (COTS). It offered a $500 million prize to the company able to come up with a vehicle to move cargo and people back and forth from the International Space Station.

Thirty months later, the Space Frontier Foundation issued a despairing white paper. NASA couldn’t let go entirely: While suggesting that it was open to private solutions, NASA invested millions in a redundant system, scaring off would-be contestants for the COTS prize. NASA Administrator Michael Griffin, the paper declared, “claims that he hopes that COTS will work, but that he needs to fund NASA vehicles to go to [the space station] as an ‘insurance policy’ against the possibility that COTS doesn’t work. But most insurance policies are a small amount of the value of the thing being insured.”

Part of NASA’s unwillingness to gracefully cede suborbital jaunts to the private sector is its fear about “closing the gap.” This “gap” is the period between 2010, when the space shuttle is decommissioned, and whenever its replacement kicks in. The COTS prize, recently awarded to a SpaceX/Rocketplane partnership, is encouraging. But it’s hard to ask outside entrepreneurs to throw themselves into a project they know will be pushing against NASA’s entrenched bureaucracy.

NewSpacers don’t consider NASA irredeemable, however. Ken Davidian, a NASA consultant, was the surprise winner of the popularity contest at the Vegas conference. He came representing the agency’s prize program, officially known as the Centennial Challenges. Davidian spoke gleefully about competitors for the prizes who spend many more millions to win than the prizes themselves are worth. “Whatever their motivation is, we don’t question it very much because we’re making out like bandits,” he exclaimed. “They do understand capitalism!” whispered Jeff Krukin, executive director of the Space Frontier Foundation, who was sitting next to me in the audience.

But the nerd orgy really began when Davidian clicked over to open a blank PowerPoint slide and asked for ideas for new prizes. For the first time all day, the crowd really perked up. Just a few of the ideas for prize contenders: largest lunar radiation-proof windows, first transmission of one kilowatt of power from orbit, paving the lunar surface for easier landing, and a fully funded college education for the first baby conceived in space. The whole affair was an embarrassment of riches. “This happens everywhere I go,” Davidian says. He speculates that “even the most hard-core NewSpace guys really have a soft spot for NASA. NASA got them into this stuff in the first place, right?”

As the conference participants tried to shout each other down, there was a distinct scent of testosterone in the air. Richard Godwin, president of the space publisher Apogee Books, says that’s typical of such gatherings. Though a young industry, NewSpace is already subject to some Golden Age-ism. “There was time when it was more purely cooperative, but now there’s less collaboration and more competition,” Godwin says wistfully. But then he shifts gears: “That’s probably a good thing, actually.” He even suggests taking the impulse all the way: “Everyone thinks they’re the smartest guy in the room. I think we should just have a mud-wrestling match. Everyone, shirts off, and we’ll decide who’s smartest right here, right now.”

The question will be answered one way or another in the next 24 months. Someone will be able to make money by taking people into space on a privately developed, privately owned spaceship. They won’t go very far, and they won’t be gone very long. But just a few short years ago, the smartest guys in the room were content to sit around and argue better than anyone else. Now—with help from an infusion of smart, rich guys—they’re fighting for success in a competitive industry with real results on the horizon.

And the mud-wrestling match? You know the industry is growing up, because when Godwin repeated his proposal to several fledgling CEOs, not one reached to unbutton his shirt.

Katherine Mangu-Ward is an associate editor of Reason.

CORRECTION: In "Space Travel for Fun and Profit" (January), NASA's COTS contract was incorrectly described as having been given to a partnership of Rocketplane and Space X. In fact, the award was divided between the two companies.