STATEMENT OF ELON MUSK, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, SPACE EXPLORATION TECHNOLOGIES (SPACEX)

So, Mr. Chairman and Members of the Committee, thank you for inviting me to testify here today.

The past few decades have been a dark age for development of new human space transportation systems. One multibillion dollar government program after another has failed. In fact, they have failed even to reach the launch pad, let alone get to space. Those in the space industry, including some of my panel members, have felt the pain firsthand. The public, whose hard-earned money has gone to fund these developments, has felt it indirectly. The reaction of the public has been to care less and less about space, an apathy not intrinsic to a nation of explorers, but born of poor progress, of being disappointed time and again.

When America landed on the Moon, I believe we made a promise and gave people a dream. It seemed then that, given the normal course of technological evolution, someone who was not a billionaire—not an astronaut made of ’the right stuff,’ but just a normal person—might one day see Earth from space. That dream is nothing but broken disappointment today. If we do not now take action different from the past, it will remain that way.

So what strategies are critical to the future of space launch vehicle development? And here my testimony, I think, will be a little different. First and foremost, I think we should increase and extend the use of prizes. This is a point whose importance cannot be overstated. If I can emphasize, underscore, and highlight one strategy for Congress, it is to offer prizes of meaningful scale and scope.

This is a proposition where the American taxpayer cannot lose. Unlike standard contracting, where failure is often perversely rewarded with more money, failure to win a prize costs us nothing. Offering substantial prizes for achievement in space could pay enormous dividends. We’re beginning to see how powerful this can be by observing the X Prize, a prize for suborbital human transportation, which is on the verge of being won. It is a very effective use of money, as vastly more than the $10 million of prize money is being spent by dozens of teams that hope to win. At least as important, however, is the spirit and vigor it has injected into the space industry and the public-at-large. It is currently the sole ember of hope that one day they, too, may travel to space.

Beyond space, as the Committee is no doubt aware, history is replete with examples of prizes spurring great achievements, such as the Orteig prize for crossing the Atlantic nonstop by plane, and the Longitude Prize for ocean navigation.

Few things stoke the fires of creativity and ingenuity more than competing for a prize in fair and open competition. The result is an efficient Darwinian exercise with the subjectivity and error of proposal evaluation removed. The best means of solving the problem will be found, and that solution may be in a way and from a company that no one ever expected.

One interesting option, although radical, might be to parallel every major NASA contract with a price valued at one-tenth of the contract amount. If another company achieves all of the contract goals first, they receive the prize and the main contract is canceled, but the objective achieved. At minimum, it will serve as a spur for whoever does win the main contract.

Some people believe that no serious company would pursue a prize; this is simply beside the point. If a prize is not won, it costs us nothing. Put prizes out there, make them of meaningful size, and many companies will vie to win, particularly if there are a series of prizes of successively greater difficulty and value. I recommend strongly supporting, and actually substantially expanding up, the proposed Centennial prizes put forward in the recent NASA budget. No dollars spent on space research will yield greater value for the American people than those prizes.

Second, I think we should rigorously examine how any proposed new vehicle will improve the cost of access to space. The obvious barrier to human exploration beyond low-Earth orbit is the cost of access to space. This problem of affordability dwarfs all others. I do not think there are multiple problems in space; I think there is one, and that is the cost of access to space.

If we do not set ourselves on the track to solving it with a constantly improving price-per-pound to orbit, in effect, a Moore’s Law of space, neither the average American, nor their great-great-grandchildren will ever see another planet. We will be forever confined to Earth, and may never come to understand the true nature and wonder of the universe. So it is critical that we thoroughly examine the probable cost of alternatives to replacing the Shuttle before embarking upon a new development. The Shuttle today costs about a factor of ten more per flight than originally projected. We do not want to be in a similar situation with its replacement.

In fact, it was precisely to improve the cost and reliability of access to space—initially for satellites, and later for humans—that I established SpaceX, although some of my friends still think the real goal was turn a large fortune into a small one.

Our first offering, called Falcon I, will be the world’s only semi-reusable orbital rocket, apart from the Space Shuttle. In fact, we employ a reusable first stage and an expendable upper stage, as Aerospace Corporation recommends as the smart approach to improving cost. So although Falcon I is a light-class launch vehicle, we have already announced and sold the first flight of Falcon V, our medium-class rocket.

Long-term plans called for development of a heavy-lift, and even a super-heavy, if there was customer demand. We expect that each size increase would result in a meaningful decrease of cost-per-pound to orbit. For example, dollar-cost-per-pound to orbit dropped from $4,000 to $1,300 between Falcon I and Falcon V. Ultimately, I believe $500-per-pound or less is very achievable.

Item 3 was ensuring fairness in contracting, but I will stop there.