Spaceflight Insider

OPINION: Commercial Crew – It was never about saving money

Crew Dragon at ISS

An artist’s rendering of a Crew Dragon on final approach to docking with the International Space Station. Image Credit: SpaceX

The last time NASA had to pay for astronauts to hitch a ride to the International Space Station (ISS) with the Russians on their venerable Soyuz spacecraft, they paid – on average – nearly $82 million per seat, for a total of six seats. That’s $490 million to transport six astronauts to and from the ISS.

The Bear knows how to play Monopoly


Think about that for a moment: NASA has paid Russia almost half a billion dollars to ferry six people to the ISS. It appears that the former communists have learned capitalism in a fairly short time – Soyuz seats have increased 384 percent in 10 years. Having no competition allows Russia to increase prices with relative impunity.

To be fair, that amount does cover more than just taxi service to the orbiting outpost – launch services and flight training are also included in that “low, low” price. However, that’s still a lot of money to be sending to a government that may be actively operating against U.S. institutions.

Moreover, Russia’s military actions in Syria and Crimea has raised troubling questions.

As if this wasn’t enough, members of the Russian government have made comments suggesting that the nation is considering an end to its work on the space station. This makes ending the dependence on Russian launch services not only appealing but also sensible.

Since 2010, NASA has been working with private companies as part of the agency’s Commercial Crew Development (CCDev) program, with the goal of accelerating development of commercial space capabilities which it hopes will allow NASA to regain the ability to launch NASA astronauts to low-Earth orbit from U.S. soil.

Just a tad late


With the nearly $8 billion awarded and disbursed to the two primary CCDev partners, SpaceX ($3.144 billion) and Boeing ($4.82 billion), NASA had hoped to resume crewed flights from Kennedy Space Center (KSC) sometime in 2015.

That’s right: 2015.

A quick glance at a calendar is all one needs to see that neither SpaceX nor Boeing have met that initial goal. Surely, though, it’s only a small delay and they’ll launch before the end of 2016, right? How about mid-2017?

Not even close.

Both Boeing and SpaceX have encountered significant delays in preparing their individual systems for launching NASA’s astronauts, and they are both nearing the end of 2018, or even early 2019, for their first crewed flights to the ISS. In order to ensure the agency can still get their astronauts to the ISS with these continued Commercial Crew delays, NASA had to give Russia substantially more money per seat in 2017 and 2018: $76.3 million and $81.1 million, respectively.

Assuming that one or both American companies are able to begin launching crew to the ISS by the end of 2018, that means the United States would have paid Russia nearly $3.37 billion over 13 years to train and transport 64 astronauts to the ISS, averaging almost $53 million per seat over that period.

Let’s go for the cheap seats


Certainly, though, even if the Commercial Crew providers are running a little behind, they’ll be significantly cheaper… right? It depends on how one calculates the cost. According to Lisa Colloredo, Associate Manager of NASA’s Commercial Crew program, the agency expects to pay approximately $58 million per seat, which is close to the historical average for the Soyuz seats.

If one figures three crewed flights per year (two for crew rotation and one for short duration science flights), each consisting of three NASA astronauts, that comes to 20 flights (two flights in 2018, three each in 2019–2024). Those 60 seats total $3.48 billion.

However, that per-seat price is separate from the billions already awarded to both SpaceX and Boeing as part of the CCDev program. That would mean NASA will have spent $8 billion for CCDev, plus $3.48 billion in seat costs, to send astronauts to the ISS.

But to what end? Even if crewed flights begin in early 2018 (which is unlikely), the ISS may very well stop being operated as a NASA-supported outpost as early as 2024 and may cease operating altogether by 2028.

One might consider that the products from these commercial companies would be cheaper than buying seats from the Russians and that these firms just need the boost from the government to get started. Certainly, SpaceX largely owes its existence to NASA’s largesse, and it continues to operate primarily on the government’s dime:

However, SpaceX receives the majority of its funding from NASA, and according to one internal NASA document, as much as 85 percent of the company’s revenues to date have come from the space agency through its multibillion dollar commercial crew and cargo contracts. Put simply, if not for NASA, SpaceX would probably be flying the Falcon 1 or 5 rocket today or might not exist at all. — Op-ed: We love you SpaceX, and hope you reach Mars. But we need you to focus by Eric Berger, Ars Technica 

So, it would appear that the U.S. taxpayer will provide the commercial companies billions of dollars in taxpayer money to develop crew capability, then pay billions more to use this capability to fly astronauts to a location that might not be around much longer.

What if we kept paying Russia?


Soyuz seat prices have increased, on average, 14.71% since 2009.

Soyuz seat prices have increased, on average, 14.71% since 2009.

The per-seat cost to fly astronauts on Soyuz has increased, on average, 14.71 percent per year since 2009 (and only a smidge more than 11 percent if one includes 2006 through 2008). If one were to extrapolate that average increase for each year following our currently contracted seats, through the end of the current commitment to operate ISS – 2019 through 2024 – we would end with a tremendous $184.7 million per seat in 2024, totaling nearly $4.85 billion over that six-year period, assuming 6 seats per year.

The totality of the contracted Soyuz seats from 2006 through 2018, plus the extrapolated seat prices with the 14.71 percent annual increases from 2019 through 2024, comes to $8.22 billion. Admittedly, that’s not the sort of money one finds in their couch cushions; indeed, that’s quite a lot for NASA to pay for a seat on a Soyuz.

But Commercial Crew has to be cheaper than that, right?

Considering the currently-awarded amount to the two main Commercial Crew partners stands at $7.964 billion – and that’s before a single astronaut takes flight – plus $58 million per seat thereafter, it’s hard to make any argument that Commercial Crew was ever about saving money.

In fact, the difference between the seats already purchased from Russia – plus the extrapolated seat prices – and only the CCDev contracts awarded to Boeing and SpaceX is $256 million. Once five NASA astronauts have launched on Commercial Crew, that difference is erased.

Despite this, if the U.S. is going to invest in aerospace firms, they should be domestic ones and not be with organizations whose allegiance is to those who has been at odds with America for a majority of the time since the end of World War II.

When all is said and done, CCP isn’t about being cheaper than Russia, it’s about maintaining a capability that the U.S. shouldn’t have lost in the first place.

 

The Views expressed in this editorial are those of the author and do not, necessarily, reflect those of SpaceFlight Insider.

 

Tagged:

Curt Godwin has been a fan of space exploration for as long as he can remember, keeping his eyes to the skies from an early age. Initially majoring in Nuclear Engineering, Curt later decided that computers would be a more interesting - and safer - career field. He's worked in education technology for more than 20 years, and has been published in industry and peer journals, and is a respected authority on wireless network engineering. Throughout this period of his life, he maintained his love for all things space and has written about his experiences at a variety of NASA events, both on his personal blog and as a freelance media representative.

Reader Comments

You do a good job comparing the cost and schedule of CCP to Russian crew services. However, as you indicate, the US should have its own means to put crews into space. So I believe you should expand your analysis to compare CCP to the alternative of a standard NASA internally led crew vehicle program. If you use the Constellation plan for the Ares 1/Orion crew system, the CCP comes out looking quite good.

– Ares 1 had already slipped to 2017 by the time the program was cancelled. No doubt it would have slipped further.
– By the time Orion flies a crew for the first time, the total cost will be in the $20B range
– Ares 1 certainly would have added many billions to that amount.
– The Ares 1-X suborbital test flight cost about the same as the entire COTS program

So, yes the CCP is late and not cheap but it will provide two highly capable crew launch systems at a fraction of the cost of Ares 1/Orion.

It’s also important to point out that
– NASA pushed CCP into a FAR procurement mode, which raised costs compared to a true commercial purchase of services approach.
– Congress did not meet CCP funding requests until the past couple of years. It was significantly under-funded for the first few years and NASA warned that this would result in delays.

Regarding SpaceX costs, it is again important to compare to the alternative of a standard internal NASA led program. Dan Rasky, who worked in the COTS/CRS program, talks in this NASA video –
https://youtu.be/VHeyOGfR7nE
– about a study in which the NASA/USAF NAFCOM cost model predicted that development of the F1 and F9 rockets should have cost about $4B. SpaceX in fact spent about $400M total to develop both rockets. I expect a comparison of costs for Dragon as well as Orbital’s Antares/Cygnus would also be substantially less than a NASA program to do the same.

Regarding LEO access for NASA, even if the ISS is abandoned after 2024, NASA has indicated it will still be active in LEO via commercial stations. Furthermore, access to cislunar operations will be significantly cheaper with commercial vehicles compared to Orion/SLS.

Finally, CRS and CCP accomplish what NASA is supposed to do. The Launch Services Purchase Act of 1990 modified NASA’s charter (Paragraphs 203(a)) to include instructions to:

“4) seek and encourage, to the maximum extent possible, the fullest commercial use of space; and

(5) encourage and provide for Federal Government use of commercially provided space services and hardware, consistent with the requirements of the Federal Government.”

Not sure why you’re comparing a vehicle which has to travel to an altitude of about 260 miles to one that has to travel to the Moon (250,000 miles) or perhaps Mars (9 million miles).
Given your statement starts off with a rather obvious dishonest comparison no one can take anything you say after that seriously.
This is particularly damning considering Ares was cancelled like 8 years ago. Why are you complaining about a program that no longer exists? You keep comparing things that aren’t designed for the same purposes and then hoisting it up as some “proof.” The only thing that it proves is you’re disingenuous.
This seems like more of the NewSpace fanboy bait and switch tactics that we’ve seen so often. Look, we get it, you guys want the big contracts. However, until you can keep your stuff from blowing itself up and you actually launch somebody (anybody) to orbit? You’re not going to get them. Try getting an astronaut to LEO first, then, maybe, you’ll be consider for the deep space efforts. Until then? Pick up a broom and clean up the rubble at SLC-40.

You’re ignoring that as part of CCDev, NASA is also gaining up and down mass capabilities that Soyuz/Progress does not (cannot) provide. The vehicles developed under CCDev don’t just transport astronauts, they also provide 2-3 times the cargo upmass of a Progress, and match the down mass capabilities of the current uncrewed Dragon (a capability Soyuz does not have).

Even if the central conclusion of this article ends up being correct (that after development costs, the per seat cost of the commercial vehicles only matches what NASA currently pays per seat for launch with the Russians), we need to account for the associated benefits of a return to ISS logistical capabilities that haven’t existed since the days of the Shuttle.

A shallow analysis worth of GM.

The economic benefits of buying seats on US rockets is significantly more than the amount spent. Depending which study your read, the aerospace multiplier for economic activity is 2.6.

That means for every $1 the US Government spends on aerospace it generates $2.6 in economic activity (the engineers get paid, they pay for groceries, cars, school trips for their kids etc). So $58 million spent for a seat on commercial crew generates $150.8 million in economic activity. Money spent for Soyuz seats is a loss to the economy (Russian engineers buy Russian groceries etc.) which means, in terms of benefits to the economy, buying a commercial crew seat is $150.8 + $82 = $230.8 million.

That economic activity generates taxes (assumptions follow, to simplify the calculations for ease of illustration).

The first tier (the direct payment) is for highly paid aerospace engineers so presume 20% tax revenue for that tier ($11.6) and the second tier is lower paid so presume 10% tax ($9,28) for total tax returned to US Government coffers of $20.88 million dollars. Assessed as a per seat discount that reduces the cost of each seat to $37.12 million on US domestic providers. Paying money to the Russians generates no domestic taxes so that equates to a loss of $16.4 million. These calculations are for Federal taxes only, not State taxes, since the Feds are paying the bills.

This is why districts with aerospace companies in them are so beloved by politicians.

Charles Bolden has said he expects there to be a commercial successor to the ISS and many of your assumptions are based on the ISS ending NASA activities in LEO. Since you amortised the cost of commercial crew over the ISS program, that makes operating any successor program much cheaper. That is the horizon NASA is thinking about with commercial crew

Anders apologetic

I retract my first sentence and unreservedly apologise to Curt – nobody with a serious interest in space flight should have their work compared to posts by (a well known space flight forum troll whose name should not be uttered) simply for stating a genuine opinion. I shall strive to be more gracious in future.

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