Space Travel: financing the final frontier

After years of investigation into space, we have still only scratched the surface. And as public investment slows, so too does progress. Now the private sector has stepped in, hoping to cash in
Peter Bond

'Funding - that's what makes your ships go up,' a reporter told his audience of would-be astronauts in the movie The Right Stuff. 'No bucks, no Buck Rogers. Whoever gets the funding, gets the technology. Whoever gets the technology stays on top.'

40 years on, after many billions of dollars of expenditure, 12 humans have walked on the Moon, more than 400 individuals have travelled into space, images from weather satellites appear daily on our TV screens and hundreds of communication satellites have created a global village in which, from the comfort of their armchairs, billions of people can witness dramatic events as they unfold in the most remote regions of the world. So what are the prospects for the exploration and exploitation of space in the 21st century?

The space age

On 4 October 1957, a modified intercontinental ballistic missile lifted off from a secret launch site in central Asia. On board was a small metal sphere named Sputnik, the product of a mysterious Soviet team headed by an unnamed chief designer. As the world's first man-made satellite circled the Earth once every 90 minutes, this tiny example of communist technology caused consternation in the West, and heralded the dawn of the space age.

Over the following decades, expenditure by space agencies or other government bodies (particularly the military) has traditionally dominated space activities. Only now, at the beginning of the 21st century, has the balance of public versus private finance begun to radically alter.

While global government spending on space programmes has remained virtually static at around $38bn a year in recent years, and prospects for future increases are poor, private investment and demand for commercial space services have been soaring.

Estimates published by Futron Corporation indicate that global expenditure on commercial space activities exceeded government expenditure for the first time in 1999 - although the situation is muddied somewhat by public subsidies, procurements and shareholdings in private sector ventures. Recent trends suggest that commercial expenditure is likely to jump to three times the level of public spending by 2005.

American domination

For more than four decades, the US has held the number one position for space investment, and there is little indication that this will change in the foreseeable future. In 1998, the US government contributed 75% of the world's public space spending, with about half of this accounted for by NASA alone. Second in the US financial pecking order is the National Reconnaissance Office, which has a budget of around $6.5bn with which to manage America's fleet of intelligence and surveillance satellites.

Other space powers are dwarfed by comparison. Third place goes to the European Space Agency, whose overall annual budget of about $3bn is derived from contributions by its 15 member states. The leading contributors to ESA's coffers are France (approximately 35%), Germany (24%), Italy (15%) and the UK (8%). Japan is also a prominent investor in space technology, with annual expenditure of $1.8bn. Coming up on the rails are the fast-developing industrial economies of India (whose 1999 expenditure of $534m was almost double that of the UK) and China.

Calculations of space budgets in China and Russia are fraught with difficulty, and can only be regarded as rough estimates at best, particularly since dollar comparisons are quite misleading. A recent report by consultants Euro-consult, commented: 'Though its chaotic budget situation has been far from enviable in the past few years, the Russian Space Agency (RSA), with the Rbs2083bn it received in 1997, certain-ly bought more hardware and grey matter than its dollar countervalue, about half of Italy's space budget, would suggest. Low labour rates and large economies of scale make Russian space hardware comparatively inexpensive.'

The report suggests that a realistic figure for the 1997 Russian civil space budget would be about $850m in a western economy. However, since then the Russian programme has suffered badly from high inflation and massive budget cuts. This parlous condition is exemplified by the failure of the state to provide sufficient funds to operate the Mir space station - with the result that the venerable flagship of the Russian space programme will be ignominiously ditched in the Pacific Ocean in February.

While the opening up of the commercial launch services market to Russian launch vehicles and collaborative ventures with western companies have partially compensated for shortfalls in domestic funding, the same cannot be said of China, which has suffered in recent years from American-imposed launch quotas and satellite export licence restrictions. Nevertheless, China has made great strides in its launcher and satellite development programmes, and now has the confidence to publicly announce that it intends to launch astronauts into space in the very near future. As Eurospace, the European space industry's trade association, commented in its worldwide survey of government space programmes, 'the Chinese space programme is undoubtedly broader in scope than those of Sweden or the Netherlands, which have similar budgets in dollar terms'.

Fluctuating fortunes

In many respects, the private sector mirrors public investment in space, with American companies dominating the commercial markets. The title of the world's largest space company belongs to the Boeing Corporation, whose Space and Communications Group reported sales of $6.8bn in 1999. This dominance was reinforced in November 2000 when Boeing paid $3.75bn to acquire the satellite-manufacturing arm of Hughes Electronics Corporation, the world's largest dedicated space company.

Traditionally recognised as an aircraft manufacturer, Boeing became a major player in the commercial space stakes during the 1990s through a series of mergers, most notably with Rockwell Corporation, manufacturers of the highly successful Delta 2 launch vehicle. The company is now heavily involved in provision of launch services, both through its expanding series of Delta launchers and as a partner in the Sea Launch programme to launch Ukrainian Zenit rockets from a sea-going launch platform.

Even before its acquisition of Hughes, Boeing was a major manufacturer of commercial communication satellites. However, like all US space companies, government contracts still play a highly significant part in Boeing's portfolio. One of the jewels in its crown is the US Air Force's Global Positioning System (GPS), which is used worldwide for navigation and accurate position-location. Boeing also rules in the US human spaceflight programme, both as the prime contractor for the largely American-funded International Space Station (ISS) and as co-owner of the Shuttle fleet operator, United Space Alliance, with its nearest competitor, Lockheed Martin Corporation.

With space-based sales figures of $6.4bn in 1999, Lockheed Martin Corporation runs Boeing a close second in the league table of the world's leading space companies. Once again, the mammoth company is the result of a series of major mergers, and its business is broadly based, covering satellite manufacture, launch services and human spaceflight.

Apart from its home-grown Atlas, Titan and Athena launch vehicles, Lockheed Martin is involved in a joint venture to market Russian Proton rockets. It has also invested heavily in Comsat, the US signatory to the global Intelsat satellite organisation. On the human spaceflight front, Lockheed Martin supplies the huge solar panels for the ISS, under contract to Boeing.

Only when considered in its entirety does the European space industry compare with either of these industrial giants. In 1998, space employed 34,883 people in 14 European countries and generated a global turnover of nearly l8.7bn. In order to compete with the American Goliaths, European industry has restructured though major company mergers. The outcome is that the European scene is now dominated by two major players: the European Aeronautic, Defence and Space Company (EADS) and Alcatel Space.

EADS was created recently by merging the space divisions of Paris-based Aerospatiale Matra, Munich-based DaimlerChrysler Aerospace and Madrid-based CASA. As the owner of 75% of Europe's leading satellite manufacturer, Astrium, and 100% of EADS Launchers and CASA Space, EADS is involved in all aspects of space hardware manufacture - commercial, military and science satellites, Ariane rockets (the world's most successful commercial launchers) and Europe's contributions to the ISS.

Faster, cheaper, better?

Downsizing has been a notable trend in the space science programme. Soon after taking up office, NASA administrator Dan Goldin determined to reduce the costs and gestation period of science missions while increasing their numbers. Various programmes were implemented to put this vision into practice, including the Discovery series of faster, cheaper, planetary spacecraft and the New Millennium effort to fast-track new technologies.

Goldin argued that, for the approximately $2bn that it costs to build and operate a single, mega-sophisticated spacecraft such as the Galileo Jupiter Orbiter or the Cassini Saturn Orbiter, NASA could launch 10 small planetary missions. In comparison, it could take a decade or more to define and develop a multi-instrumented spacecraft such as Galileo; a Discovery mission to Mars or a comet could be put together in less than half that time. Such a quick-fire launch rate had the added advantage that the technologies used would not be significantly outdated by the time they flew, and the scientists involved would not have spent a large proportion of their academic lives waiting for their experiments to be flown.

This rationale certainly seemed to be justified after the unexplained loss of the $1bn Mars Observer spacecraft as it approached the Red Planet in 1993. In contrast to this catastrophe, the first of NASA's Discovery missions, Mars Pathfinder, was a tremendous success. After landing on the planet's arid surface on 4 July 1997, the spacecraft returned some 16,500 panoramic images of the rock-strewn, dusty plains and recorded the meanderings of a 10kg rover as it crawled from rock to rock.

However, this undoubted technical triumph masked the fact that Pathfinder was primarily a technology demonstration mission. The scientific data, though intriguing, was only a secondary consideration. Furthermore, Pathfinder's overall cost of $265m (including $55m for launch and $14m for operations) was noticeably higher than the $150m (plus launch) budget allocated to such missions when the Discovery programme was introduced in 1994.

Pause for thought

If Pathfinder seemed to support Goldin's drive for a more cost and labour efficient programme, its successors have experienced mixed success. Lunar Prospector mapped the mineral content of the entire Moon and found strong circumstantial evidence for the existence of water in permanently shaded craters at the lunar poles. After a near-disaster in 1999, the NEAR-Shoemaker spacecraft became the first man-made satellite of an asteroid. The Mars Global Surveyor also narrowly avoided an embarrassing technical flaw to become the most successful orbital reconnaissance mission ever to orbit the Red Planet.

However, the embarrassing failure of two Mars missions in late 1999 has given NASA pause for thought. Mars Climate Orbiter, which was carrying many of the experiments previously flown on the ill-fated Mars Observer, also disappeared without trace on arrival at the Red Planet. Weeks later, contact was lost with the Mars Polar Lander and its payload of two dart-shaped probes that were developed under the New Millennium programme.

The review boards set up to investigate the twin calamities were scathing in their condemnation of a Mars programme that was under-funded, used ill-trained engineers and inexperienced managers. The cost-cutting not only resulted in a lack of spacecraft reliability, but also created a damaging staff shortage that was exacerbated by heavy workload and insufficient support from senior NASA management.

NASA's Goldin, architect of 'faster, cheaper, better', was forced to admit that 'the failure rate has gone up significantly in the last few years. The warning bells are sounding and that trend is very sobering and one that none of us can ignore.' As a result, NASA has carried out a major restructuring of its future Mars programme which involves slower spacecraft development programmes and higher costs. This has had the unfortunate consequence of damaging other parts of the space science programme.

Four NASA planetary missions have been cancelled in the past two years with large increases in development costs being blamed. Similar cost over-runs are now threatening the Europa Orbiter mission. In a recent statement, the American Astro-nomical Society issued a statement deploring this state of affairs.

'The large number of mission cancellations and losses gives rise to serious concern for the future of the US planetary exploration programme . . . An overemphasis on 'cheaper' of faster-cheaper-better, combined with a pattern of underbidding, has been a root cause of losses and overruns. We commend the agency for attacking these problems head-on.

'However, NASA must guard against a return to performance-at-any-price and extreme fear of risk, as these will result in excessively reduced programme content. The large increases in development costs that have resulted from the recent failures suggest that the middle ground has not yet been found in seeking the proper trade between cost and performance.'

The space ahead

For the foreseeable future, the world's major space agencies' budgets will be largely dominated by human spaceflight. NASA's annual budget will continue to allocate $3bn to operating and maintaining the four Space Shuttles - at a cost of around $400m per flight. Between now and 2006, the vast majority of the shuttle flights will be allocated to construction and crew inter-change on the ISS.

The ISS itself has been swallowing up more than $2bn a year of NASA's budget in recent years, although this expenditure should tail off as the hardware is completed and launched into orbit. Altogether, the 16 partners in the world's largest peacetime construction project will have invested more than $40bn in the huge structure before it is completed in 2006, and further billions will be required for operations and maintenance over its 10-15 year lifetime. Other space agencies in Europe and Japan will also be concentrating on the ISS and upgrades to expendable launch vehicles.

As NASA attempts to encourage commercialisation of the ISS and to justify its enormous cost, scientific research will probably continue to struggle for government funds. However, a number of major astronomical observatories are planned in the next decade, including the Next Generation Space Telescope (in which Europe will also participate) and NASA's fourth 'great observatory', the Space Infrared Telescope Facility.

Over the coming years, solar system exploration will be dominated by the Red Planet. NASA and its international partners, most notably Italy and France, will be concentrating on a revamped Mars programme. Six missions involving orbiters, landers and surface rovers, will prepare the way for the first sample return mission around 2014.

ESA, too, has its Mars Express orbiter and British-built Beagle 2 lander, but the agency's main focus will be its large cornerstone missions. These include the Rosetta comet orbiter and lander, the First/Planck mission to study the early universe, the BepiColombo mission to Mercury, the GAIA mission to pinpoint and count billions of stars, and the Laser Interferometer Space Antenna, which will test Einstein's general theory of relativity.

Closer to home, Earth observation remains an important research area for space agencies and scientists investigating such important problems as global climate change and the enlargement of the ozone hole. Commercial remote sensing is also on the verge of a growth surge as technology drives prices down and improves capabilities. Satellites with one-metre spatial resolution, multi-spectral imagery and rapid repeat coverage of the planet's surface are creating an applications industry with high growth potential.

Less rosy is the outlook for the traditional space infrastructure companies - satellite manufacture, launcher production and development. Investors are likely to avoid these high-risk enterprises, concentrating instead on projects with proven revenue-generating capacity. The commercial satellite industry as a whole is expected to grow from $55bn in 1999 to $177bn by 2008, with most of this increase accounted for by satellite services.

As GPS markets and applications continue to flourish, Europe is planning to invest several billion dollars in its own civilian-operated navigation satellite system. The market for satellite navigation user equipment and services in Europe alone is projected to be worth some $200bn between 2005 and 2025.

Despite such promising ventures, expenditure on space, whether public or private, is likely to remain tightly constrained in the first decade of the 21st century. The opportunities to earn big bucks will still be there, but the adventurous spirit exemplified by the Mercury astronauts in The Right Stuff is likely to be replaced by short-term pragmatism.

Peter Bond is an award-winning author and space journalist. His latest book, Zero G: Life and Survival in Space, is published by Cassell.

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