Supply and Demand Issues Lead to Spike in U.S. Launch Costs

ULA's Atlas V

In my talk with David Livingston on The Space Show last night [listen here], he mentioned a Space News story from last month about a spike in U.S. launch costs that I had missed. I looked it up today and here’s the essence of it:

While 2011 is expected to be a banner year for NASA’s planetary science program with three missions scheduled for launch, future initiatives are threatened by budget uncertainties and a dramatic spike in the price of launch vehicles, according to an agency official.

“This is a really difficult financial environment,” Jim Green, NASA’s director of planetary science, said Dec. 15 at a meeting of the American Geophysical Union here.

Rides into orbit for NASA’s 2011 planetary missions, the Mars Science Laboratory (MSL), the Juno mission to Jupiter and the Moon-bound Gravity Recovery and Interior Laboratory (GRAIL), were purchased under the first NASA Launch Services (NLS) contract. That contract, which does not include specific quantities of rockets to be purchased or delivery dates, sets prices for launch vehicles and related services for NASA’s planetary, Earth observing, exploration and scientific satellites.

In September, NASA awarded a second set of NLS contracts to Denver-based Lockheed Martin Space Systems, Orbital Sciences Corp. of Dulles, Va., Space Exploration Technologies (SpaceX) of Hawthorne, Calif., and United Launch Alliance of Littleton, Colo. Prices in the second NLS contract round are “significantly higher” than the prices included in the first, Green said. He declined to reveal specific prices.

NASA planetary missions typically are launched aboard Atlas 5 and Delta 2 rockets built by United Launch Alliance, a Boeing-Lockheed Martin joint venture. The Delta 2 has been phased out of production, however, and only a few vehicles remain available.

Timing appears to be the major issue here. While the supply of the medium-class Delta 2 is shrinking, other rockets have not come online fast enough to give NASA additional options. SpaceX’s Falcon 9 has had two successful flights, not enough for the space agency to feel comfortable putting payloads aboard it just yet. Orbital Sciences Corporation’s Taurus II rocket, another medium class launch vehicle, will make its inaugural flight later this year.

This is a key issue in that ULA’s Atlas V has become the baseline for at least three proposals submitted for funding under NASA’s Commercial Crew Development (CCDev) program. It will be interesting to see what happens to launch pricing if there is an increased demand for ULA’s rockets, upon which the military is also dependent for payload launches. On the other hand, supply will expand once Falcon 9 and Taurus II mature as delivery systems.