May 25, 2014: The U.S. government is being forced to use satellite launchers developed without government financing because the usual methods of obtaining these launchers is falling apart and currently is unable to supply enough rockets to get all American military satellites into orbit. The immediate cause of this problem is the recent (since earlier this year) Russian aggression against Ukraine. The U.S. responded to this aggression by placing sanctions on some Russian officials and firms. Russia responded to that by halting RD-180 shipments to the United States. That’s breach of contract and it will do enormous damage to Russian exports in the future because now many countries and firms realize that a contract with a Russian firm can be cancelled by the Russian government for any reason. This was always seen as a risk when doing business with Russia and many Western firms declined to do so or have pulled out of Russia in the last decade because of the growing unreliability of Russia as a business partner. The RD-180 affair got a lot of publicity, all of it bad with regard to future Russian exports of high-end industrial items. Europe, which gets about a third of its natural gas from Russia, is already looking for alternate sources and investors are fleeing Russia (and taking their money with them).

The RD-180 once seemed like a sweet deal for the U.S. and Russia. The RD-180 is a 5.5 ton rocket engine that is a 3.56 meters (11.5 feet) tall and 3.15 meter (10.25 foot) diameter marvel of simple, reliable, powerful and cheap rocket motor design. Developed in the 1960s, some American rocket experts (like Charles Vick) suspected during the Cold War that Russia had cheaper, more powerful and reliable rocket engines like this but these claims were dismissed by most American rocket experts. After the Cold War ended in 1991 the U.S. got a close look at Russian rocket engines and realized that Vick was right. One of these engines, the RD-180, was available for export, for about $10 million each. By the end of the 1990s the U.S. had a long-term contract to buy modified (to work in the American Atlas V rocket) RD-180s from Russia and a license to build RD-180s in the U.S. (using some Russian components that would be much more expensive to manufacture in America).

The U.S. currently has two years’ supply of RD-180 engines. The U.S. also has a license to produce the RD-180 in the United States, but to develop the suppliers for all the components now supplied by Russia would take five years. Best case is that it would cost the U.S. an additional $2.5 billion dollars to set up production and obtain more expensive launch services elsewhere in the meantime. Since the best case rarely happens it is more likely that it would take seven years to get RD-180 production going and cost at least an additional $5 billion to pay for launch alternatives. Many satellite launches would be delayed three years or more.

This is good news for the new private firms that are developing rockets for launching stuff into orbit. One such firm is SpaceX (Space Exploration Technologies Corporation) and is has been trying to break the current cartel controlling U.S. government satellite launch services. Since 2006 all this business has gone to a government-approved monopoly called the ULA (United Launch Alliance) which is composed of Lockheed Martin (Atlas 5 rocket) and Boeing (Delta 4). These two firms have dominated U.S. space launches for over half a century. Because of the RD-180 the Atlas 5 is more attractive (in terms of performance and price) than the Delta 4. Meanwhile SpaceX expects to have  Atlas 5 competitor ready in a few years.

In 2012 SpaceX obtained its first contract to launch U.S. military cargo into space. SpaceX had earlier obtained a NASA contract which included 12 deliveries to the International Space Station (at $134 million each). What makes all this so noteworthy is that SpaceX developed its own launch rockets without any government help. SpaceX also developed the Dragon space vehicle, for delivering personnel and supplies to the International Space Station.

SpaceX has since proved that its rockets work and is pointing out that the SpaceX rockets can do the job cheaper that ULA. Currently ULA gets a billion dollar a year subsidy from the government that SpaceX would not require. SpaceX still has to get all the paperwork and approvals done so that they can handle classified missions. SpaceX does not see this as a problem, it’s simply going to take another year to satisfy all the bureaucrats and regulations.

The Atlas 5 is a 334 ton rocket that can 29 tons into low orbit and 13 tons into GTO orbit. One potential problem here is that Atlas 5. The Delta 4 can weigh up to 733 tons and put 22 tons into low orbit and 13 tons into GTO orbit. The Delta 4 uses American made engines. SpaceX has developed three launchers. The Falcon 1 was a developmental model, used mainly for testing and was first launched in 2006. Two of its five launches were a success and the model is now retired. The Falcon 9 is a 333 ton launcher that can lift ten tons into orbit and is competitive with the older (government developed) Delta 4 and the Atlas 5 launchers. Falcon 9 first launched in 2010, and entered service in 2012. The Falcon Heavy is a 1,462 ton rocket that can 53 tons into low orbit and 21 tons into GTO orbit. Falcon Heavy is a development of the Falcon 9 and will fly for the first time in 2014.

SpaceX offers lower prices and more flexibility than most government (usually military) developed launchers. As a privately owned company SpaceX has less bureaucracy and is quicker to adapt new technology for launch services. Many existing and potential SpaceX customers see this as the future of space transportation.

While the Delta 4 and Atlas V have a proven record of reliability, SpaceX offers competition and that usually means the development of better and cheaper technology. Lockheed Martin and Boeing have lots of friends in Congress and that may prove to be the deciding factor into keeping government launch services an expensive monopoly.