Senator Brownback: Mr. Elon Musk, CEO and founder of SpaceX, who is looking to invest significantly in space travel, as well, from the private sector. Mr. Musk, delighted to have you here today.
STATEMENT OF ELON MUSK, CEO AND FOUNDER, SPACEX, EL SEGUNDO, CALIFORNIA
Mr. Musk: Thank you.
On behalf of Space Exploration Technologies, I’d like to express my appreciation for being able to come before you here to address the issues related to access to space.
It is despairing to consider that the costs and reliability of access to space have barely changed since the Apollo era, three decades ago. Yet in virtually every other field of technology, we have made great strides in reducing the cost and increasing capability, often in ways we did not dream existed. We’ve improved computing costs by a factor of 10,000 or more, decoded the human genome, built the Internet, and made intercontinental flight available to the average citizen for no more than a few hundred dollars.
The exception to this wave of development has been space launch. But why? My best guess at the origin of the problem relates to the breakdown of a process that the economist, Schumpeter, called “creative destruction.” He postulated that the way an industry improves is that new companies enter a market with a lower price or superior product. This creates a forcing function for the whole market to improve. Looking at space-launch vehicles, we see a situation where there’s been not one single successful new entrant in four decades, apart from one company in the ’80s. Even in that case, the solid rocket motors that constitute a majority of the manufacturing costs of its launches are, in fact, built by an old-line aerospace company. So we’ve really seen no truly new entrants to the American launch-vehicle market, and, therefore, should not be surprised that costs remain unchanged.
To address this problem, we must create a fertile environment for new space-access companies that brings to bear the same free-market forces that have made our country the greatest economic power in the world. If we can create such an environment, my expectation is that progress in space-launch costs and capability will be no less dramatic than in other technology sectors.
We are at a crucial turning point today. The recent entrepreneurial activity in space, my company perhaps included, shows promise, but it’s still embryonic and fragile. It is very important that our government, in all its forms, practically adopt a nurturing and supportive approach to new space-launch-vehicle developments.
It was to help change the equation of space exploration that I established SpaceX and set as our goal revolutionizing the cost and reliability of access to space, for nothing less is needed. Our first offering is a semi-reusable orbital launch vehicle called Falcon. Initially, we will deliver cargo to orbit in the form of satellites and spacecraft. However, we do believe in the long-term market for commercial human transportation.
There is no simple sound-bite that describes why our rocket is a fraction of the cost of efforts by existing launch service providers. Our approach has been to focus on reducing all of the cost elements of a launch-vehicle company, those being propulsion, structures, avionics, launch operations, and general overhead. We’ve also listened very carefully to the collective wisdom of key engineers involved with all major American rocket developments of the past three decades, to glean whatever lessons may be learned.
At this point, we’re very comfortable that selling the Falcon for $6 million per flight is economically viable. This is a reduction of over 75 percent, compared with our nearest incumbent competitor. Moreover, as SpaceX refines the recovery process for our rocket’s first stage, we believe that the price can be further reduced.
As you will no doubt hear from others on this panel and have heard, there needs to be clear regulatory authority for commercial launch vehicles of all kinds. It is also critical that such regulatory authorities recognize the early and experimental nature of the commercial launch-vehicle industry, providing only the minimum regulatory burden necessary to ensure reasonable safety for the general public. I believe that should be the key criterion.
We recommend reaffirming the authority to the AST office of the FAA as the primary regulatory agent for space vehicles. Moreover, and very importantly, progress in fostering new launch-vehicle developments should be a key metric of success in the performance evaluation of AST and other federal agencies when they report to Congress.
Environmental approval is a significant issue. For existing launch vehicles—for existing launch facilities, where launches are routinely conducted, we believe that either a blanket environmental impact statement that covers all nontoxic launch vehicles, or a categorical exclusion, such as exists for airplanes, would be immensely helpful. This would save a substantial amount of expense, paperwork and processing time.
For example, certain issues of environmental concern seem to defy common sense. The population of seals in the waters around Vandenberg increased by 12.7 percent last year, yet much concern is raised about how rocket launches might disturb them, and we are forced to spend $10,000 every launch to see if our relatively small rocket, which is nontoxic, affects their quality of life. This makes little sense. With that population growth rate, it seems clear that, if anything, the Vandenberg launch activity serves as an aphrodisiac. [Laughter]
Liability: One of the surest ways of preventing companies like SpaceX from offering human transportation in the future is to make it an unlimited-liability business. Where a single unintentional mistake can result in a multi-hundred-million-dollar jury award, it would instantly kill not only the company that made that mistake, but the entire industry.
General aviation almost perished in the ’80s as a result of one massive jury award, of questionable justice, after another. It was only revived once legislation placed reasonable limits on liability. Moreover, in contrast to the fledgling status of entrepreneurial space, aviation was a strong and mature industry with a well-developed immune system.
We believe it is appropriate that a limit be placed on liabilities such that, notwithstanding clearly egregious conduct, a mistake or force majeure event resulting in third-party injury, loss of life, or damage to property be limited to a reasonable maximum dollar figure.
For those that choose to fly on early passenger-carrying spacecraft, individuals should have the right to waive liability provided the risks are fully explained, just as would be done for extreme sports such as skydiving or mountain climbing.
And I’d like to say just a bit about how we see the market for commercial human space flight. The market for satellite delivery, while significant, has limitations in size and application. I suspect the far larger market in the long-term is serving people that wish to travel to space for enjoyment.
There is some skepticism about the market size and dependability. But such skeptics should study the early days of aviation as a guide. For many years before airmail service became the anchor that allowed the growth of commercial aviation, a thriving airplane business was underway around the Nation supporting the desire for an unprecedented adventure, an incredible notion that humans could fly.
Barnstormers satisfied that interest and became the crop of entrepreneurs and pilots from which commercial aviation would be developed. Why do we think that commercial space passenger services will be any different?
If we believe humanity should one day expand to the stars, then people must have some way to see for themselves what space is all about. They must share in its wonders and experience, firsthand, its meaning, and, in so doing, open the doorway to space for all.
Thank you.