FAA Limits Evaluation of Spaceport Infrastructure Funding Options
by Douglas Messier
Managing Editor
The Federal Aviation Administration (FAA) has rejected a recommendation from a government watchdog that it conduct detailed analysis of a broad range of financing tools for funding infrastructure projects at the nation’s spaceports.
In a report to Congressional committees, the Government Accountability Office (GAO) said it recommended to the FAA that it analyze the trade-offs of using direct loans, loan guarantees, tax incentives and other tools to increase investment in spaceport infrastructure.
The analysis would be part of a report on spaceport infrastructure funding that legislators ordered the FAA to provide Congress under the FAA Reauthorization Act of 2018. The draft report was under internal FAA review as of November.
The FAA said it is considering including the options in the final report to Congress. However, the agency told GAO that it doesn’t have the time or resources to conduct an in-depth analysis of them.
Instead, the FAA’s draft report focused on using the existing Airport Improvement Program (AIP) and reviving the Space Transportation Infrastructure Matching (STIM) program, which provided grants to spaceports during the 2010-12 fiscal years.
“FAA officials said that a factor influencing their identification of these two programs…was that the two could be implemented quickly because (1) the STIM program was previously used to support spaceport infrastructure and (2) FAA still has administrative authority to manage both programs under the current statutory scheme,” the GAO report said.
“When identifying these two programs, FAA did not comprehensively assess their effectiveness to support spaceport infrastructure,” the report added. “For example, while FAA obtained some industry input from licensed spaceports, officials acknowledged that they did not, as part of this effort, solicit information from launch providers on their requirements for spaceport infrastructure.”
Airports that hold spaceport launch site operator licenses are able to tap AIP funding for infrastructure upgrades. The Mojave Air and Spaceport has received nearly $16 million in AIP grants for runway and taxiway projects since 2010, according to the GAO report.
Mojave is primarily an airport that is also used for space operations. For example, Virgin Galactic and Virgin Orbit have used the runways during the testing of the air-launched SpaceShipTwo suborbital space plane and LauncherOne booster, respectively.
Under law, AIP matching grants are limited to aviation infrastructure projects. Expanding the program to fund projects that specifically support space operations would require action by Congress, the GAO report said. The move would prove controversial, however.
“With regard to AIP, the program already has more planned investments for airport infrastructure projects than it has available funding. Many aviation stakeholders have publicly described the use of AIP for space operations as diverting funds from its intended use—aviation-related activities,” the GAO report said.
While AIP grants can run into the millions of dollars, the STIM grants awarded during FY 2010-12 topped out at $250,000. GAO found the small amount and STIM’s rules created challenges for grant seekers.
“For example, two spaceport operators told us that the small STIM grant amounts, in combination with a large—relative to AIP—required matching amount from private and local government sources, made it difficult to fund infrastructure projects, which can be expensive,” the GAO report said.
“One of these spaceport operators noted that the administrative burden of the application was large compared to the amount of money that was available, while one spaceport representative thought that AST did not have sufficient resources at the time to administer this type of program,” the report added.
The STIM program is also limited by law to providing infrastructure funding to public agencies only.
“Under this criterion, the 12 spaceports—launch sites with FAA site operator licenses—would be eligible for the grants. Private companies operating exclusive-use sites or launch complexes on or co-located with federal ranges—where the majority of current activity is—would not be eligible,” the report said.
The GAO report noted that private space operators have have been making major investments in launch infrastructure. They are receiving financial support from state and local governments.
The FAA responded that the GAO had overstated the impact of these efforts.
“The FAA disagrees that the reason for launch providers meeting their customers’ requirements is largely a result of launch providers’ investments in launch sites. This minimizes the significant amount of federal investment in launch sites over the years at Federal ranges. The majority of commercial launches are from federal launch ranges developed over the decades with primarily federal funding,” the FAA said.
A summary of the GAO report’s findings is below.
Commercial Space Transportation: FAA Should Examine a Range of Options to Support U.S. Launch Infrastructure
Government Accountability Office
December 2020
GAO-21-154
Report
Highlights
Why GAO Did This Study
Demand for commercial space launches is anticipated to increase in the coming years. FAA, the agency responsible for overseeing the sites where these launches occur, was directed by statute to submit a report—and update it every 2 years until December 2024—that makes recommendations on how to facilitate and promote greater investments in space transportation infrastructure.
The FAA Reauthorization Act of 2018 included a provision for GAO to review issues related to space transportation infrastructure. This report discusses launch providers’ and site operators’ views on the sufficiency of infrastructure in meeting market demand and assesses the steps FAA has taken to identify options for federal support of space transportation infrastructure, among other things. GAO reviewed relevant regulations; assessed FAA’s actions against GAO identified leading practices; and interviewed FAA officials, commercial launch providers, and representatives from U.S. commercial launch sites that GAO identified as having hosted an FAA-licensed launch since 2015 or having an FAA launch site operator license as of August 2020.
What GAO Found
Launch providers support the deployment of people and payloads, such as national security and commercial satellites or research probes, into space. The majority of these providers told GAO that U.S. space transportation infrastructure—located at sites across the country—is generally sufficient for them to meet their customers’ current requirements. This situation is in part a result of the launch providers’ investments in launch sites, along with state and local funding. Launch providers and site operators alike seek future improvements but differ on the type and location of infrastructure required. Some launch providers said that infrastructure improvements would be required to increase launch capacity at existing busy launch sites, while a few site operators said that new infrastructure and additional launch sites would help expand the nation’s overall launch capacity.
The Federal Aviation Administration (FAA) was directed by statute to make recommendations to Congress on how to facilitate and promote greater investments in space transportation infrastructure, among other things. However, FAA’s initial draft report was limited because it focused only on two existing FAA programs, rather than a range of options. FAA officials stated that they did not examine other options because of limited time and resources, and that the two identified programs could be implemented quickly because FAA has administrative authority to manage them. Leading practices in infrastructure investment emphasize the importance of conducting an examination of potential approaches, which can help identify how best to support national interests; avoid overlap or duplication of federal effort; and enhance, not substitute, participation by non-federal stakeholders. An examination may also help identify alternatives to making funding available, such as increasing efficiency and capacity through technology improvements. By focusing only on these existing programs, FAA may overlook other options that better meet federal policy goals and maximize the effect of any federal investment. Although FAA has already prepared its initial report to respond to the statute, it still has opportunities, such as during subsequent mandated updates, to report separately on potential approaches.
What GAO Recommends
GAO recommends that FAA examine a range of potential options to support space transportation infrastructure and that this examination include a discussion of trade-offs. DOT partially concurred, noting that it would provide its mandated report to Congress but not conduct a new examination of a range of options. GAO continues to believe that such an examination is warranted.
9 responses to “FAA Limits Evaluation of Spaceport Infrastructure Funding Options”
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Can someone please explain why taxpayers should fund improvements for billionaires Jeff Bezos and Elon Musk, and Firefly Space with its Ukrainian connections as “Private companies operating exclusive-use sites or launch complexes on or co-located with federal ranges” when excess launch capacity exists for the foreseeable distant future? Should we also chip-in for Musk’s off-shore platforms?
I second your request for explanation. A viable business shouldn’t need subsidy, and a non-viable business probably shouldn’t get one either. At least at the state level they have the excuse of trying to create jobs, though all too often by shifting them from another state.
Of course I am one of those that is against taxpayer built stadiums for billionaire sports franchises as well. I have a strong prior that businesses should be funded by their products and thus by their investors that freely choose to invest.
edit a minute later. And yes I recognize that if one is competing in a subsidized field that rejecting subsidy can be business suicide. I.E. If I have to pay for my stadium and Podunk City pays for yours I am at a serious competitive disadvantage.
Somewhat agree. I have a bias for “space” activity, so I am of the carrot & stick approach.
As there is no “subsidy to billionaires” actually going on – except in the fever swamp between SteveW’s ears – there is also no requirement for an “explanation.”
I was the one using the term subsidy, and I do have some issues with some of the taxpayer support of facilities. Just as NASA buying a Dragon flight is not a subsidy, spending bucks on infrastructure for commercial use clearly is. Whether or not the spending is justified is the issue.
In this case you are reacting to the numerous false claims of subsidy to SpaceX for providing a service for pay, and I am reacting to the constant struggle for “free” government money by entities that are undeserving.
Then it would seem to be incumbent upon you, or anyone else making such claims, to distinguish where such claims have validity and where they don’t.
The fact is that NASA and USSF are not spending large sums on facilities that primarily benefit private entities – with the notable exception of Boeing. NASA infrastructure expenditures at KSC are entirely for the SLS-Orion program. The private operators who’ve leased formerly derelict launch complexes are thereafter on the hook for improvements and maintenance of those sites.
Launch capacity is hardly “excess.” The U.S. launched more missions in 2020 than it has in any year since 1968. 2021 should see a significant uptick again.
The taxpayer is not funding any “improvements for billionaires” – or for non-billionaires for that matter – except for a bit of minor spending for improved roads and other infrastructure items the Government insists on monopolizing.
Those “exclusive-use sites and launch complexes” were disused and decaying white elephants not long ago. The FAA is correct that the federal government once put a lot of money into such. But that investment was then abandoned and allowed to crumble. The GAO is correct that improvements to such facilities in recent years have been entirely funded by the various launch company lessees of these sites.
In addition to having taken over improvements and maintenance, the lessees also pay NASA or DoD monthly or yearly amounts for the use of the sites. There is no subsidy going on here, just the private sector rehabbing formerly abandoned federal properties and returning them to productive use.
The government will not be paying for any of “Musk’s off-shore platforms” any more than it currently pays for any other private operator’s off-shore platforms. The only future exception might be if the U.S.government wants such facilities exclusively for missions it funds. That seems unlikely, but can’t be categorically ruled out right now.
Funding is quite complicated. SpaceX has received billions in grants and subsidies for it’s various space programs. It was just awarded $900 million to provide broadband coverage in remote areas. NASA and the Air Force underwrite the lion’s share of operating and infrastructure costs for Vandenberg and Kennedy/Canaveral to the tune of several billion dollars every year. The US Fish and Wildlife Service and State of Texas own 95.7% of the 10,600′ radius launch hazard area surrounding Musk’s Boca Chica launch pad. I have no problem with support going to programs that serve a national interest. In the everyday debate about whether NASA or SpaceX should get the funding, I’d vote for SpaceX because business knows how to get things done. NASA should stick to pure research in the same way that NOAA does oceans and not fishing or boat building. And national security interests dictate that military and security operations are tightly controlled with 100% US-owned companies and GI-issue oversight.
duheagle must not count the small class rocket excess capacity which stands at 97% of annual launches. Those, and horizontal launch, are the only “spaceports” the FAA has been processing and licensing. The “record year” includes 8 Electron launches from Mahia spaceport that’s approved for 120 launches a year. And there were only three launches from Wallops and 20 from KSC/Canaveral that claims they can handle 48. So yes, we have plenty of capacity.
duheagle, I’m not a space fan-boy. I am strictly a space numbers man. Show me the moneeeeee.
SpaceX has never received a penny in “grants and subsidies for its various space programs.” It built all the Falcons and now is building Starship entirely on its own dime. It developed and built the Dragons at government behest with government money. But none of it was “grants and subsidies.” Other than contract development of spacecraft, SpaceX’s government work consists of providing launch services for government payloads. Again, there are no “grants and subsidies” involved, just payment for services rendered.
SpaceX will be getting payments for providing Starlink Internet broadband services to certain U.S. areas under a government program that was established to subsidize Internet service in thinly-populated places. The program is of long-standing as were electric vehicle subsidies that existed well before Tesla was founded.
The availability of subsidies was not the motivation for the SpaceX Starlink program. The advent of Starlink, in fact, will probably prove the death of the U.S. rural broadband subsidy program as SpaceX will not restrict customer sign-ups to merely those tracts for which its participation in the subsidy program makes it the nominal provider.
I don’t know what the infrastructure and operating costs are annually for Kennedy and Vandenberg, but I suspect “several billion dollars” substantially overstates the case. NASA’s costs at KSC are dominated by the SLS and Orion programs with which SpaceX is not involved.
SpaceX pays NASA and the Space Force rent on the LC-39A and SLC-40 pads, respectively. It has also been responsible for all the improvements and maintenance to those sites since the leases were signed for them. The same is true of SpaceX’s facilities at Vandenberg. For that matter, all the facilities used by launch services contractors at Canaveral and Vandenberg are maintained and enhanced by said contractors. SpaceX is no special case in that respect.
Given how many formerly disused Canaveral and Vandenberg launch facilities have been taken over recently by NewSpace launch providers other than SpaceX, I suspect that residual government expenditure in these places has substantially fallen in recent years. Automated Flight Termination Systems, pioneered by SpaceX, are being implemented by all NewSpace launch companies and even ULA is working on one. These systems allow both the Eastern and Western Range to dispense with a lot of formerly expensive services whose increasingly decrepit infrastructure was the main factor in capacity-limiting the launch activity possible from these places. It strikes me as quite odd to see both a rising launch cadence and annual launch capacity enabled by innovations made by the same private sector companies doing the launching in terms of “excess capacity.”
Show me the money, Dude. You claim NASA and USSF are spending billions per year in ways that somehow benefit private launch providers. Prove it.