A New Space Race Is on the Launch Pad

A powerful new rocket that produces more than 12 times the energy of Hoover Dam’s generators is slated to blast off from Cape Canaveral next week, launching a battle for the supremacy of space.

In a competition worth as much as $40 billion over the next 20 years, archrivals Boeing Co. and Lockheed Martin Corp. have developed rockets intended to dominate the launch business for satellites and other payloads.

The new rocket designs are leading to the most significant overhaul of the U.S. launch system since the 1950s, when aerospace companies began designing ballistic missiles to deliver nuclear warheads.

The continued reliance on the old rocket technology has cost the U.S. leadership in the commercial launch business in the last decade, as Western European nations, China and Russia have moved aggressively into the market.

In recent decades, the Pentagon and NASA have faltered in efforts to create advanced-technology space launchers that would dramatically reduce costs. Former NASA chief Dan Goldin lamented to Congress in 1996 that the space community “should hang its head in shame” over its failure to protect U.S. leadership in space.

After many false starts, the U.S. finally has two new rocket models, both boasting more power than any rocket developed since the Saturn V launched three men to the moon more than three decades ago. The rockets’ launch costs would range from $100 million to $150 million, significantly less than the current generation of vehicles.

The Air Force would use the new rockets to launch satellites for spying, weather forecasting, communications, navigation and other experimental purposes. Although the rockets are funded by the military for its own missions, commercial versions could help the U.S. recover business that has been lost to Arianespace, a European aerospace company.

Lockheed is taking the first shot with the launch Wednesday of its Atlas V. Boeing is scheduled to launch its Delta IV in October.

The stakes are astronomical, threatening to make the weaker competitor a bit player in the space business. The companies, the nation’s two largest defense contractors, have invested more than $2.5 billion in developing the rockets--Boeing in Huntington Beach and Canoga Park, Lockheed in Denver and San Diego.

Just five years ago, Lockheed had three-fourths of the government launch business, mainly ferrying military and spy satellites into space. Lockheed rockets now account for only a quarter of the launches, analysts said.

“They clearly have a lot riding on this launch,” said John Pike, director of GlobalSecurity.org, a defense and aerospace research firm. “If it goes flawlessly, it can help out with future government buys and have a big impact on commercial sales. If it blows up, it will continue Lockheed’s reversal of fortune.”

Both Lockheed and Boeing face stiff technical challenges. On first launches, nearly 80% of new rockets either blow up during liftoff or fail to reach the correct orbit. Boeing, for example, suffered back-to-back failures of its previous rocket, the Delta III, in the last three years and had to pay for a third launch just to show it could get it off the ground.

Lockheed executives boast that they have the industry’s best record, having successfully flown five versions of the older Atlas models on their first attempts.

“People come to us for our track record,” said Michael Gass, Lockheed’s vice president for the Atlas program. “We’re confident we can perform.”

The commercial market for launch vehicles collapsed with the tanking of the telecommunications industry, leaving the U.S. government as the main customer. Analysts said commercial rocket launches had fallen by more than 50% since 1999, but it appears to be inching up again after hitting bottom last year.

At the same time, Asian and European countries have been stepping up development of launch vehicles, vying to take a bigger piece of the world’s rocket market. Boeing and Lockheed still launch more rockets--including military missions--than anyone else, but Arianespace is closing in and now holds the market for launching commercial satellites into high orbits.

Neither Boeing nor Lockheed is expected to see much profit from the rockets until later in the decade, when commercial demand is expected to recover, analysts said.

“Profits are downstream,” said Marshall Kaplan, a former rocket engineer who is director of space programs for Strategic Insight Ltd. “They are going to be in the red so deeply, it’s going to take awhile to be profitable.”

For now, the Pentagon, which has contributed $500 million to both of the rocket programs, is the primary source of business. Because of missile defense and homeland security, the Pentagon expects to launch more military and intelligence satellites that provide remote sensing, communications and global positioning systems. Most of them would be carried into space by the new rockets.

But Pentagon officials worry about the possibility of having only one company producing the launch vehicles and are considering adding significant new funding in the 2004 defense budget to keep both programs alive.

The Pentagon wants two suppliers to ensure the availability of backup launch vehicles for its highly classified and expensive payloads. Such precautions began in the aftermath of the explosion of the space shuttle Challenger in 1986, which left the military scrambling. At the time, all government missions were supposed to fly on the shuttle.

For the last decade, the military has been relying on the expensive Lockheed Martin Titan IV rockets to launch its more-sophisticated satellites. The rocket, based on 1950s technology, was costing the U.S. as much as $400 million per mission. The current program began in 1998, when the Air Force asked both Boeing and Lockheed to develop a new vehicle, dubbed the evolved expendable launch vehicle, or EELV.

The goal was to slash launch costs by more than half and significantly cut the time to prepare a rocket for launch. In fact, the companies expect to slash launch costs in half from $6,000 per pound and reduce launch preparation from four weeks to one.

Analysts estimate that Lockheed has spent $1 billion, deciding to reconfigure its manufacturing facility instead of building a launch pad at Vandenberg Air Force Base in Santa Barbara County. Unlike, Boeing, which opted to develop a new core engine, Lockheed is relying on a Russian-designed RD-180 engine that has been used in another rocket.

The Russian engine burns kerosene, continuing a tradition in Russian rocketry of using that fuel instead of the liquid hydrogen favored by U.S. engineers.

Lockheed executives say the design and the manufacturing process for the Atlas V is significantly different from those of previous generations of rockets. For instance, Atlas has been designed to launch even when winds reach 61 knots. Strong winds have been a persistent bane for rocket launches.

With the exception of a hurricane, Lockheed said, the rocket could fly at any time and in any weather, raising its prospects for commercial customers who pay for costly delays in launches.

Meanwhile, Boeing has invested about $1.5 billion in the program. It built new launch pads at Cape Canaveral and Vandenberg, as well as a new manufacturing facility in Decatur, Ala.

Boeing also elected to develop a new rocket engine, the first in three decades.

The company had to develop a new engine for the Delta IV, the RS-68. The engine, developed at the company’s Rocketdyne facility in Canoga Park, produces 653,000 pounds of thrust, or enough to light up 17 million homes for a short time, said Boeing’s Delta program chief Daniel J. Collins, who noted that it is the first new engine developed in the U.S. since the space shuttle.

“It’s a monster,” Collins said.