For far too long, the U.S. space program has been treated as a frill—something desirable and good, but not essential to the military, economic, and scientific health of the nation.
It is difficult for Americans brought up on the history of the U.S. beating Russia to the moon to realize that their nation is now rapidly falling behind. Fifty-two countries, according to the Space Foundation, now conduct space activities. “Many nations now recognize the strategic value and practical benefits of space assets and are pursuing space capabilities.”
According to Rep. Bill Posey (R-Florida) “NASA and America’s mission in space are important components to our national security…and national economic growth; and to the advancement of new technologies and our global economic competitiveness. America’s achievements in space are universally recognized and admired around the world. Yet, today our nation’s leadership in space is being threatened by Russia, China, India and others. We must recognize and respond to this threat with urgency. We cannot rely on our past and pretend that is enough to propel us as the world leader in space. Too many in Washington have lost the vision and they have taken our past achievements for granted…We, as a nation cannot afford to take a backseat to anyone when it comes to space. We must lead. Our failure to do so will cede the final frontier to others who do not have our best interest at heart and it will jeopardize our technological superiority, our economic security and our national security.”
America’s Space Industry is faltering. While NASA has sought to move forward, the budget plug gets pulled with alarming regularity. According to Posey, “In the last 20 years NASA has spent more than $20B on cancelled development programs.”
The U.S. Chamber of Commerce notes that “The United States invented the space industry, but steadily over the last decade or more, the country has seen global competitors increase their capability to launch satellites and people into space, even as the United States has spun its wheels and gained little ground, stuck in the quicksand of bureaucracy and misaligned public and private interests…
“This industry is very smart, and we’re living off a set of past wonders that were achieved in the 60s, 70s and 80s and think that that carries through to today,” said John Higginbotham, chairman & CEO of Blue Ridge Networks. “We have to get real and look in the mirror. We had it right , but the recipe got out of whack…Maybe we should listen to people in other industries, in other countries, and look at other business models.”
In the hey-day of American space exploration, the U.S. private sector worked hand-in-hand with their public counterparts, collaborating to develop something the world had never seen. Though rocket science grew out of World War II, NASA, other parts of the U.S. government and the American private sector took an emerging idea and refined it into a robust industry. It also did this in record time. Recently, however, the public-private relationship has broken down with cascading effects throughout the industry and those industries that support it.
“If you actually look at the launch industry,” said Linda Maxwell, Aerospace, Defense and Government (ADG) Investment Banking Group, Houlihan Lokey, who also spoke on the panel, “when United Launch Alliance is using Russian and Ukrainian rockets to throw our commercial satellites into space, you know something is wrong…”
“In the ‘80s and ‘90s, the United States was a satellite powerhouse, providing satellite capabilities for more than 90% of the global market. …To have the statement that 1 out of 25 satellite operators is a resident of the United States is a dismal failure.”
What happened? Export controls and International Traffic in Arms Regulations (ITAR). Since 1976, the United States has kept a list of defense-related technology, weapons and other items whose export and import is regulated by the federal government. ITAR was borne of the Cold War and the U.S. effort to control arms exports. In 1999, another set of technologies was added to the regulated U.S. Munitions List – satellites. This made what was already a costly and complex endeavor significantly more challenging, if not impossible in some cases.
With heavy regulations on U.S. business’ ability to sell satellite infrastructure, companies and investors also lost the cash flows that come from providing goods and services. By limiting how satellite infrastructure could be used, sold and launched, the United States effectively took itself out of 95% of the global market – this for an industry America invented and propelled to world-changing ends.
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“If you ask major aerospace firms why they are losing to competitors abroad, it is because of ITAR regulations,” said Maxwell. “International customers don’t want to come here…The amount of regulation on the way that the government does business is stifling the profitability and time to market.”
In 2013, the National Defense Authorization Act removed that restriction, though it may have been too late.
“Even as U.S. space initiatives have slowed to a leisurely stroll, other countries are sprinting ahead, seizing the opportunity to acquire a larger stake in the industry while the United States sleepily allows its supremacy in space to slip away…
“While regulations are a hindrance, another challenge for investors and the U.S. space industry overall is a lack of a national mission and unreliable mission consistency between administrations…”
NASA’s Budget Woes
Rep. Posey, in statements noted by the Tampa Bay Times and the Miami Herald, has been sharply critical of President Obama’s role in cutting funding for key space agency programs, particularly manned space flight. In 2011, he stated “After the administration let NASA flounder for the past two years, a flawed NASA authorization bill was finally agreed to and signed into law… Now the administration is proposing to ignore this law, placing a higher priority on global warming research and making cuts to the next-generation launch vehicle. Over two years ago, the president promised to close the space gap, but now he seems intent on repeating the events that created the space gap in the first place — putting in place a new rocket design and then trying to underfund the effort, ensuring that it will never happen and ceding American leadership in space to China and Russia.”
Of course, NASA’s problems did not first arise under the Obama presidency, although his Administration must take responsibility for pulling the plug on the Shuttle program before a substitute crewed vehicle could be prepared, and for diverting funds away from key projects to more fully fund climate change studies.
This year, The Republican-controlled Congress has also cut funding from the development of crucially needed commercial crewed vehicles. The reason given was that it allowed dependence on Russian craft for too long going forward.
Space defense also troubled
It is not just the civilian side of space that is a concern.
The Breaking Defense publication quoted Deputy Defense Secretary Bob Work’s worries about “increasing threats” against America’s satellites “While we rely heavily on space capabilities, in both peace and war, we must continue to emphasize space control as challenges arise…To maintain our military dominance we must consider all space assets, both classified and unclassified, as part of a single constellation. And if an adversary tries to deny us the capability, we must be able to respond in an integrated, coordinated fashion.” China’s capability to destroy U.S. satellite in orbit is a key motivation for the Pentagon’s concern.
On June 26, Rep. Mike Rogers (R-Alabama), chair of the House Armed Services Committee addressed a hearing of the Subcommittee on Strategic Forces on America’s reliance on Russian rocket engines. He stressed that without “an effective space launch program, we lose all the advantages from space capabilities. Losing space for our warfighters is not an option… Because we are committing to ending our reliance on Russian engines, we must invest in the United States rocket propulsion industrial base. Investment in our industry for advanced rocket engines is overdue. While we may lead in some areas of rocket propulsion, we are clearly not leading in all. This is painfully obvious considering that 2 out of the 3 U.S. launch providers we have here today rely on Russian engines. And it’s not just the Russians leading the way — according to online press reports, the Chinese may be flying a new launch vehicle on a maiden flight this summer, with similar technologies as the Russians, using an advanced kerosene engine.”