Development of the American commercial space industry: imminent federal decisions and implications for economic development in the states

As he prepares his 2010 state of the state and FY 2011 budget messages, President Obama is widely said to be leaning toward outsourcing to commercial firms some of NASA’s mid-term launch operations (such as resupply of the International Space Station, or even other exploratory ventures).

For intelligent discussion of the options the President has been exploring since late 2009, see the report of the Augustine Commission (formally known as the Review of Human Spaceflight Plans Committee). While not as cheap as the “base case” in-house programs, commercial operations stand a better chance of actually achieving interesting goals and inspiring ordinary Americans, so look for them in these documents, I’d say. I’ll update this post when we know if I’m right. UPDATE (1/24/10): WSJ says it’s going to happen.

A decision to go commercial would mean canceling or scaling back dramatically in-house development programs like the Ares I rocket, and that’s bad news for states that host associated NASA Centers or NASA’s prime contractors that tend to hang their hats nearby. UPDATE 2 (2/1/10): Yep, it’s official. From NASA budget press conference: Ares canceled. Still pretty modest expenditures on commercial launches but realistically now there’s no alternative for low earth orbit.

However, it could be good news for those states where the new generation of new and nimble commercial operators intend to exploit the “airmail” or “internet” models under which government contracts build an entirely new technology-based industry aimed at commercial customers.

Make no mistake. This shift to commercial is already under way. There are new players of some scale like Orbital, SpaceX, Virgin Galactic, and many, many smaller ventures. In fact, even the primes have mobilized through joint ventures like United Launch Alliance and individually to capture this business in the event they are no longer working directly on NASA programs, but instead for NASA to deliver payloads to orbit. There’s a big difference, but either way they intend to profit.

Commercial space firms and their suppliers (many indistinguishable from “ordinary” high-tech businesses) do not necessarily nest in the traditional places. According to the FAA’s Office of Commercial Space Transportation (summary map and excellent full report), there are seven “federal” spaceports (that is, under either military or NASA control) around the nation; another seven already-licensed “non-federal” spaceports (sponsored mainly by state-chartered aerospace development authorities); and another eight “proposed” spaceports of diverse type.

The table below summarizes these data, noting the broad mandates of these space authorities to develop comprehensive aerospace sectors, including enabling technologies of all types. The table also lists states with NASA Centers and their expertises, some but not all of which will be salient to Augustine’s call for enhanced attention to “technology development” necessary to meet long-term, inspirational space goals.

A shift to commercial operations for near-term launch capacity would not necessarily affect NASA’s later-stage plans for heavy-lift vehicles, but once you unleash the forces of capitalism it’s very hard to say where things will end up.

It’s very early to have much certainty, but I’d say that a shift in federal policy toward commercial operation presages a subtle but notable shift in the center of gravity of the American space program from the South/Southeast to the Far West and Southwest, with lots of interesting economic-development consequences. What do you say?

The geography of commercial space development