SpaceX: Glib Salesman Takes NASA For A Ride

This week’s Bloomberg Businessweek contains the latest adulatory media profile of Elon Musk, the California entrepreneur who is said to be shaking up the space-launch industry. As usual, the profile is long on Musk’s opinions and short on any details about how his space business is actually performing. Good thing for Musk, because so far his inspiring rhetoric about making access to space cheap and easy just isn’t panning out in real life. In fact, compared with the performance of his Space Exploration Technologies Corporation — popularly known as SpaceX — the traditional launch providers he regularly derides seem like paradigms of efficiency.

Musk looks to be a big beneficiary of the Obama Administration’s move to commercialize space travel, mainly because he is willing to make promises nobody else will. His working assumption appears to be that if he reduces prices far below what current launch providers are charging, that will unleash pent-up demand that will permit huge economies of scale in building and launching rockets. No doubt about it, we could definitely build launch vehicles more cheaply if customers were demanding a launch every other week. But the laws of physics aren’t going to change no matter how much demand spikes, and Musk’s track record to date is not encouraging. Consider:

— The initial launch of SpaceX’s Falcon 1 vehicle was delayed over two years, and then suffered three failures before finally achieving a successful launch five years late.

— The initial launch of SpaceX’s Falcon 5 vehicle was originally expected to occur in 2005, and never happened at all.

— The initial launch of SpaceX’s Falcon 9 vehicle was delayed three years, and the company is now trying to back out of price commitments it made.

Nobody ever said that getting into space would be easy, but when a company has suffered three catastrophic launch failures in a mere seven missions, that’s not a good sign. Nonetheless, NASA can’t seem to get enough of SpaceX, shelling out $2 billion to get its launch vehicles to a point where they can begin lifting payloads into orbit to support the Space Station and other missions. It’s interesting to note that Musk and his investors have only put about one-tenth of that amount into SpaceX, even though they present the company as an entrepreneurial, market-driven undertaking. The stodgy traditional suppliers that Musk thinks are being left behind by history — Boeing, Lockheed Martin and their ilk — have managed to invest $4 billion of their own money in developing new launch vehicles, which is a lot more money than the government put into their projects. So who’s really taking risks here, and who is just relying on taxpayer dollars to build a business?

The last time that California gurus predicted the era of commercial spaceflight had arrived, it turned into a disaster for the U.S. space program. Private demand evaporated in the bust. Maybe this time is different, but journalists should be looking a lot closer at whether the SpaceX business model is going to get us there, or this is just another taxpayer subsidy for rich investors. When even the Chinese say they can’t match a company’s prices, there’s only two likely explanations. Either Elon Musk is an alien visitor from some superior off-world civilization, or his prices are going to rise later. Guess which possibility is already coming true for NASA.