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