Fixed costs dominate launch costs

Current issues in NewSpace
http://www.thespacereview.com/article/823/1

From above:

Sowers was optimistic that additional demand for the Atlas 5
from commercial orbital manned missions could benefit all users
of the vehicle. "The launch vehicle industry is very highly
invested in fixed costs," he said. "If there's a new big market
we think we can get factors of two to four, nearly, in cost
reduction by increasing launch rates by factors of two to four."

I know NewSpace is looking for even greater cost reductions, but what stuck
in my mind is the potential launch costs reductions that are there if NASA
would abandon Ares I/V and buy Atlas and Delta launches instead.

Jeff
--
"They that can give up essential liberty to obtain a
little temporary safety deserve neither liberty nor
safety"
- B. Franklin, Bartlett's Familiar Quotations (1919)

On 5 Mar, 15:20, "Jeff Findley" wrote:
Current issues in NewSpacehttp://www.thespacereview.com/article/823/1

From above:

Sowers was optimistic that additional demand for the Atlas 5
from commercial orbital manned missions could benefit all users
of the vehicle. "The launch vehicle industry is very highly
invested in fixed costs," he said. "If there's a new big market
we think we can get factors of two to four, nearly, in cost
reduction by increasing launch rates by factors of two to four."

I know NewSpace is looking for even greater cost reductions, but what stuck
in my mind is the potential launch costs reductions that are there if NASA
would abandon Ares I/V and buy Atlas and Delta launches instead.

Quite - and that's from LM. What would Spacex offer?

That's why Constellation should be launched with a contract for about
24 Atlas V Heavy / Delta IV Heavy / Falcon S9 Heavies every 24 months.
Even on current list prices, NASA would save money.

On 5 Mar, 20:38, "Alex Terrell" wrote:
On 5 Mar, 15:20, "Jeff Findley" wrote: Current issues in NewSpacehttp://www.thespacereview.com/article/823/1

From above:

Sowers was optimistic that additional demand for the Atlas 5
from commercial orbital manned missions could benefit all users
of the vehicle. "The launch vehicle industry is very highly
invested in fixed costs," he said. "If there's a new big market
we think we can get factors of two to four, nearly, in cost
reduction by increasing launch rates by factors of two to four."

I know NewSpace is looking for even greater cost reductions, but what stuck
in my mind is the potential launch costs reductions that are there if NASA
would abandon Ares I/V and buy Atlas and Delta launches instead.

Quite - and that's from LM. What would Spacex offer?

That's why Constellation should be launched with a contract for about
24 Atlas V Heavy / Delta IV Heavy / Falcon S9 Heavies every 24 months.
Even on current list prices, NASA would save money.

Problem is too much competition. Any capitalist worth his salt would
buy Proton/Soyuz - At any rate until the market was big enough to
reduce costs by a factor of 4. As I said in "Establish Demand" we are
quite happy to leave other pieces of technology to the marketplace.
Somehow space is a symbol of national virility in a way cars are not.

OK we need the knowledge - True. We sinply archive CAD we don't
destroy it. Apart from that why is space different from cars?


- Ian Parker

On Mar 6, 1:54 am, "Ian Parker" wrote:
On 5 Mar, 20:38, "Alex Terrell" wrote:





On 5 Mar, 15:20, "Jeff Findley" wrote: Current issues in NewSpacehttp://www.thespacereview.com/article/823/1

From above:

Sowers was optimistic that additional demand for the Atlas 5
from commercial orbital manned missions could benefit all users
of the vehicle. "The launch vehicle industry is very highly
invested in fixed costs," he said. "If there's a new big market
we think we can get factors of two to four, nearly, in cost
reduction by increasing launch rates by factors of two to four."

I know NewSpace is looking for even greater cost reductions, but what stuck
in my mind is the potential launch costs reductions that are there if NASA
would abandon Ares I/V and buy Atlas and Delta launches instead.

Quite - and that's from LM. What would Spacex offer?

That's why Constellation should be launched with a contract for about
24 Atlas V Heavy / Delta IV Heavy / Falcon S9 Heavies every 24 months.
Even on current list prices, NASA would save money.

Problem is too much competition. Any capitalist worth his salt would
buy Proton/Soyuz - At any rate until the market was big enough to
reduce costs by a factor of 4.

I remember a presentation by Jordin Kare comparing launch costs, with
a row in the table labelled, simply, "Anything Russian". In fact,
it's the only thing I remember about that presentation. The lack of a
true competitive market for launch might be attributed to the
perception of a native launch industry as a national asset (which it
certainly is, in the defense complex.)

As I said in "Establish Demand" we are
quite happy to leave other pieces of technology to the marketplace.
Somehow space is a symbol of national virility in a way cars are not.

Yes. There are cars that can get you laughed at even if you don't
crash them or get them blown up. Not that a native automobile
industry can't be a symbol of national virility -- several nations
make their own cars when they'd probably be better off with imports.

OK we need the knowledge - True. We sinply archive CAD we don't
destroy it. Apart from that why is space different from cars?

Let me count the ways. ;-)

Mass market: Henry Ford discovered that if he paid his workers more,
he got all the money back and then some, because higher paid workers
could afford his cars. Somehow, I don't expect this kind of positive
feedback loop to establish itself in space vehicle production.

Low substitutability: the modern cityscape and its suburbs have
reached the point where there is no good substitute for the car. For
most space applications, there are substitutes, in some cases better
or cheaper ones.

Industrial synergy: Most of the industries that fed the nascent
automobile industry were also feeding other industries at the time.
Cars started out as truly "horseless buggies". However, space is an
extreme environment, and to reach it requires exotic engineering. Can
you think of a terrestrial industrial use for a launch-worthy rocket
engine? For an ion drive? One of my favorite ghettoized concepts for
heat rejection in space is something called the Liquid Droplet
Radiator. Try as I might, I can't think of a good terrestrial
application for it. Space has, in some cases, provided an early
proving ground for some technologies (solar cells, for example, and I
think the first computer made with integrated circuits was in the
Apollo CM.) However, in general, the more you optimize something for
space uses, the less cost-effective it is on the ground.

National defense: a full marketization/globalization of space access
would mean surrender of the industry to the low-cost leaders,
eventually if not sooner. This mattered relatively little to a nation
like Japan, but Japan has been under the US nuclear umbrella since WW
II. I'm no big fan of ballistic missile defense, but if it could be
made to work, it might be good for cheap space access -- not because
depoying BMD yields economies of scale in launch (as in the Brilliant
Pebbles scenario), but because it Makes the World Safe for Big Dumb
Cheap Rockets, whether from India, Russia, China, or hell, Iran and
Pakistan if it came to that. Russia's edge in launch costs has a lot
to do with paying workers 1/10th of what they are paid in the U.S.

I'm probably missing a couple more differences.

-michael turner

On 6 Mar, 15:19, "Michael Turner" wrote:
On Mar 6, 1:54 am, "Ian Parker" wrote:





On 5 Mar, 20:38, "Alex Terrell" wrote:

On 5 Mar, 15:20, "Jeff Findley" wrote: Current issues in NewSpacehttp://www.thespacereview.com/article/823/1

From above:

Sowers was optimistic that additional demand for the Atlas 5
from commercial orbital manned missions could benefit all users
of the vehicle. "The launch vehicle industry is very highly
invested in fixed costs," he said. "If there's a new big market
we think we can get factors of two to four, nearly, in cost
reduction by increasing launch rates by factors of two to four."

I know NewSpace is looking for even greater cost reductions, but what stuck
in my mind is the potential launch costs reductions that are there if NASA
would abandon Ares I/V and buy Atlas and Delta launches instead.

Quite - and that's from LM. What would Spacex offer?

That's why Constellation should be launched with a contract for about
24 Atlas V Heavy / Delta IV Heavy / Falcon S9 Heavies every 24 months.
Even on current list prices, NASA would save money.

Problem is too much competition. Any capitalist worth his salt would
buy Proton/Soyuz - At any rate until the market was big enough to
reduce costs by a factor of 4.

I remember a presentation by Jordin Kare comparing launch costs, with
a row in the table labelled, simply, "Anything Russian". In fact,
it's the only thing I remember about that presentation. The lack of a
true competitive market for launch might be attributed to the
perception of a native launch industry as a national asset (which it
certainly is, in the defense complex.)

As I said in "Establish Demand" we are
quite happy to leave other pieces of technology to the marketplace.
Somehow space is a symbol of national virility in a way cars are not.

Yes. There are cars that can get you laughed at even if you don't
crash them or get them blown up. Not that a native automobile
industry can't be a symbol of national virility -- several nations
make their own cars when they'd probably be better off with imports.

OK we need the knowledge - True. We sinply archive CAD we don't
destroy it. Apart from that why is space different from cars?

Let me count the ways. ;-)

Mass market: Henry Ford discovered that if he paid his workers more,
he got all the money back and then some, because higher paid workers
could afford his cars. Somehow, I don't expect this kind of positive
feedback loop to establish itself in space vehicle production.

Low substitutability: the modern cityscape and its suburbs have
reached the point where there is no good substitute for the car. For
most space applications, there are substitutes, in some cases better
or cheaper ones.

There are commercial applications of space. Comm sats, GPS/Galileo,
Earth resource satellites. OK there are terrestrially based
alternatives, but space is generally reckoned to be cheaper. OK
worldwide fiber optics is an alternative to comm sats. Probably better
for the civilized environment but satellites are essential for marine
and aviation applications.

Industrial synergy: Most of the industries that fed the nascent
automobile industry were also feeding other industries at the time.
Cars started out as truly "horseless buggies". However, space is an
extreme environment, and to reach it requires exotic engineering. Can
you think of a terrestrial industrial use for a launch-worthy rocket
engine? For an ion drive? One of my favorite ghettoized concepts for
heat rejection in space is something called the Liquid Droplet
Radiator. Try as I might, I can't think of a good terrestrial
application for it. Space has, in some cases, provided an early
proving ground for some technologies (solar cells, for example, and I
think the first computer made with integrated circuits was in the
Apollo CM.) However, in general, the more you optimize something for
space uses, the less cost-effective it is on the ground.

Robotics is very much dual use, but I will agree with you on your
examples
National defense: a full marketization/globalization of space access
would mean surrender of the industry to the low-cost leaders,
eventually if not sooner. This mattered relatively little to a nation
like Japan, but Japan has been under the US nuclear umbrella since WW
II. I'm no big fan of ballistic missile defense, but if it could be
made to work, it might be good for cheap space access -- not because
depoying BMD yields economies of scale in launch (as in the Brilliant
Pebbles scenario), but because it Makes the World Safe for Big Dumb
Cheap Rockets, whether from India, Russia, China, or hell, Iran and
Pakistan if it came to that. Russia's edge in launch costs has a lot
to do with paying workers 1/10th of what they are paid in the U.S.


I think it would perhaps be better not to mention defense too much. If
there is a real sandbag danger then I think that alternatives to space
should be sought EVEN IF THEY ARE MORE EXPENSIVE. Cable - not
commsats. Use mobile phone bases NOT GPS. Synthesize meterological
maps from ground and aircraft based observations. You see it is
possible that the space age will end in the next few years.

OK you say that Russia and China have no desire to sandbag. This is
only true because they don't want to go to war anyway! Either defense
is all a big con, or we should seriously think of abandoning space. In
point of fact I myself believe it is a con - you are right that no one
wants to sandbag. However we have got to look at the careers of
military officers. If the truth got out they would all be retired
early.

I will repeat, in any hard fought symmetical war the loser is going to
bring the roof down if he can.


- Ian Parker
I'm probably missing a couple more differences.

-michael turner- Hide quoted text -

- Show quoted text -

As far as wage costs are concerned we must compete in all other fields
with that difference. Russia cannot produce cheaper computers on the
basis of lower wage costs - or cars for that matter. It wage costs are
the sole difference - why not have Ariane of a NASA heavy lifter built
in Russia?

As far security is concerned it would perfectly possible to take a
Proton to bits and store the results on CAD. There are precedents. I
recall that the early days of WW1 the British were paying Krups of
Essen royalties for every fuse used! Needless to add this soon stopped.

On Mar 6, 3:19 pm, "Michael Turner" wrote:
Mass market: Henry Ford discovered that if he paid his workers more,
he got all the money back and then some, because higher paid workers
could afford his cars. Somehow, I don't expect this kind of positive
feedback loop to establish itself in space vehicle production.

It didn't exist for cars, either. Ford discovered that if he paid his
workers more he got better workers and they stuck with the job, and
the improved productivity and reduced turnover easily paid for the
higher wages.

The rest is just an urban myth, though one that's proven very hard to
kill.

Mark

On 6 Mar, 15:19, "Michael Turner" wrote:
On Mar 6, 1:54 am, "Ian Parker" wrote:



On 5 Mar, 20:38, "Alex Terrell" wrote:

On 5 Mar, 15:20, "Jeff Findley" wrote: Current issues in NewSpacehttp://www.thespacereview.com/article/823/1

From above:

Sowers was optimistic that additional demand for the Atlas 5
from commercial orbital manned missions could benefit all users
of the vehicle. "The launch vehicle industry is very highly
invested in fixed costs," he said. "If there's a new big market
we think we can get factors of two to four, nearly, in cost
reduction by increasing launch rates by factors of two to four."

I know NewSpace is looking for even greater cost reductions, but what stuck
in my mind is the potential launch costs reductions that are there if NASA
would abandon Ares I/V and buy Atlas and Delta launches instead.

Quite - and that's from LM. What would Spacex offer?

That's why Constellation should be launched with a contract for about
24 Atlas V Heavy / Delta IV Heavy / Falcon S9 Heavies every 24 months.
Even on current list prices, NASA would save money.

Problem is too much competition. Any capitalist worth his salt would
buy Proton/Soyuz - At any rate until the market was big enough to
reduce costs by a factor of 4.

I remember a presentation by Jordin Kare comparing launch costs, with
a row in the table labelled, simply, "Anything Russian". In fact,
it's the only thing I remember about that presentation. The lack of a
true competitive market for launch might be attributed to the
perception of a native launch industry as a national asset (which it
certainly is, in the defense complex.)

I wonder how much of their fixed costs have been covered. Just as some
of LM's and Boeing's are by the Pentagon.