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SpaceX and NASA are launching astronauts—and a new orbital economy?

Buckle your seatbelts.
  • Tim Fernholz
By Tim Fernholz

Senior reporter

The United States will make its return to human spaceflight when Elon Musk’s SpaceX attempts to fly two astronauts, Doug Hurley and Bob Behnken, onboard its crew Dragon spacecraft to the International Space Station (ISS) on May 27.

What American engineers are about to do—debut a new spacecraft that can carry humans off this planet and into orbit—has only been attempted eight times in history.

What makes this different, then? Strip away the national symbolism surrounding today’s launch—no easy task—and you’re left with the first human carrying spacecraft designed by a private company and, no coincidence, it’s perhaps the cheapest ever made.

That is a paradigm shift that promises a whole new world of economic activity in space, with private organizations doing what once required an entire nation, creating new opportunities for experimentation and discovery. Or it could be another false dawn in the search for a sustainable space activity, with ballyhooed technology failing to make the dollars and cents add up.

The “commercial crew” program’s roots were planted fifteen years ago, when NASA began experimenting in earnest with outsourcing the design and operation of its spacecraft. The model succeeded in producing vehicles that provide regular cargo service to the International Space Station. Now, it will fly humans to orbit. In the years to come, it could drop them onto the surface of the moon.

“We know that we’ve got partners out there that have already invested large sums of their own money into these capabilities,” NASA administrator Jim Bridenstine said earlier this year. “That’s not the way it was done in the 1960s when we went to the moon.”

The approach embodies contradictions. It is celebrated for taking advantage of private capital invested by the companies who partner with the US space agency, but neither the agency nor the companies will disclose how much has been invested. That investment is supposed to be recouped by flying non-NASA customers—astronauts from other countries, corporate researchers, wealthy tourists—but they are few and far between.

Still, commercial crew has managed to move faster and stay on budget compared to other NASA projects which explicitly eschew private capital and insist that NASA is the only suitable customer for their wares. The agency estimates it saved as much as $30 billion by building its new spacecraft this way.

If this test mission goes well, the space agency will be able to prove with subsequent flights that it has a safe and reliable way to get people to the ISS, maximizing its investment into the two-decade old orbiting laboratory. But is that enough?

The road to orbit

The crew Dragon spacecraft waits for its passengers on the launch pad.

Taking humans to space requires keeping them alive in a vehicle accelerating many times past the speed of sound, beginning in comfortable Florida beach weather and ending in the vacuum of space, where the temperature consistently oscillates between 250 degrees F and -250 degrees F, depending on the sun. It’s risky, and often riskier than we understand. Astronauts on the first Space Shuttle flight thought they had a one in 500 chance of disaster, but retrospective analysis suggests that their odds of survival were actually one in 12.

The putting-people-into-space business began with a burst of Cold War energy that lasted barely a decade. After the USSR sent Yuri Gragarin on a single turn around the earth in the Vostok-1, the US followed in 1962, with John Glenn in the Mercury. Both countries would upgrade those single seaters to multiple-seat models, and by 1968, Cold War space vehicles peaked with the Apollo and Soyuz spacecraft, with an upgraded version of the latter still in service today. Later, in 1999, China would join the human spaceflight club with its Shenzou space capsule.

In the 1970s, the US developed the Space Shuttle, a partially-reusable space plane that could carry astronauts, launch satellites and even build orbital habitats. The versatility of the Shuttle was also its undoing—being able to do so much required a complex vehicle that ultimately would prove too unsafe for NASA to continue using after accidents in 1986 and 2003 killed fourteen astronauts.

The decision to retire the Space Shuttle was the first step towards today’s flight. NASA lacked its own means of getting its personnel to the Space Station, in which it had invested some $100 billion. US astronauts flew to the ISS onboard Soyuz spacecraft operated by their Russian partners, but this limited the number of astronauts that could be on station. For the US, this wasn’t a great look geopolitically, and from a nuts-and-bolts perspective, Russia kept jacking up the cost of seats.

Under president George W. Bush, NASA hired several companies to develop robotic spacecraft that would fly cargo to the ISS to help take some of the pressure off other ISS partners. It insisted on fixed contract prices, but allowed the private firms to own the resulting intellectual property.

Elon Musk had founded SpaceX in 2002 with a dream of pushing human life out into the solar system, but its collaboration with NASA on the cargo program forged the company and developed its two key products—the Falcon 9 rocket and the cargo Dragon spacecraft. SpaceX and the other participant in the cargo program, Orbital Sciences (which has since been acquired by Northrop Grumman) contributed more than half of the total costs of their rocket and space capsule, $454 million and $590 million, respectively.

At the same time, NASA had been developing a large new spacecraft and rocket intended to replace the Space Shuttle for reaching both the ISS and destinations in deep space. Those programs were traditional approaches, with contractors guaranteed a profit and NASA owning the designs, and they were delayed and over-budget. In 2010, president Barack Obama cancelled that program and moved NASA to bet on private companies to carry humans to ISS, while narrowing the focus of the traditional program to deep space missions.

In 2014, SpaceX and Boeing were each tapped to deliver a new spacecraft. The race to the station was on.

Model Matters

Today, NASA’s deep space programs—the Lockheed Martin spacecraft Orion and the Boeing Space Launch System (SLS) rocket—are widely criticized for years of delay and mounting unanticipated costs. The commercial crew program has hardly escaped criticism—from lawmakers, skeptical Apollo veterans, and industrial rivals. But the differences are instructive.

The two commercial crew contractors also missed deadlines due to technical challenges, though years of delays are rightfully attributed to Congress giving the companies less money than anticipated. Boeing, SpaceX’s rival in the race to make these new vehicles, discovered deep-seated problems in how the company built the software that controls its Starliner spacecraft in a failed 2019 test flight.

Notably, however, these delays have not cost the public very much money because the contract amounts are fixed in advance, unlike cost-plus contracts that cover expenses and guarantee contractors a profit. The only confirmed private investment in commercial crew is the $410 million Boeing will spend re-doing its test flight later this year. In contrast, if a major test of Boeing’s SLS taking place this year must be repeated, the cost would be borne by taxpayers under the traditional contract structure.

Benji Reed, the head of SpaceX’s crewed flight program, cited the development of the company’s workforce as a key investment. The largest cost for aerospace programs is in the salaries of the highly-trained engineers and technicians who design and test these vehicles. Delays add up because of these personnel costs—but even though SpaceX and Boeing were supposed to deliver their vehicles in 2017, they’ve had to eat unexpected salary costs for the last three years.

“Even though we can’t share the private amounts that the companies have invested, we’re also not asking the American people to take it on faith,” Doug Loverro, the NASA official in charge of human spaceflight, told Quartz before he resigned last week for apparently unrelated reasons. “We’d rather they judge the results…These companies are willing to make these commitments because they can see the long-term potential to sell services to both the US government and to private citizens.”

All this talk about contract style is dry, but it matters. Casey Dreier, a space policy analyst The Planetary Foundation, found that the crew Dragon flying today is the lowest cost among past US spacecraft programs, and likely the cheapest in history.

There are several reasons for this: One is ambition—getting seven people into orbit is very hard, but not as hard as getting them to the moon or beyond, so you’d expect the crew Dragon to be cheaper than Orion or Apollo. Many key components for spacecraft, like computers, solar panels and engine parts, are cheaper and more easily manufactured today. But giving private firms skin in the game appears to be a major factor in reducing cost, according to Dreier and other analysts.

Still, he wants to know how much money the two companies spent alongside taxpayers. “The public is putting in a lot of money to this, I think it’s a valuable thing for the public to know how much the private sector contributed to this,” he says.

One of the most important factors in making public-private partnerships effective is outsourcing the risk that goes along with developing rockets. Both inside and outside of NASA there is a recognition that the agency has been unable to balance the necessary trial-and-error of technology development with political pressure to demonstrate success.

“If you can outsource that to a private company, you can have SpaceX blow up six rockets,” Dreier explains, referencing SpaceX’s explosive efforts to develop its reusable rocket. “It’s not a statement of national capability anymore. They have the luxury of learning from failure and building upon that.”

Space business

NASA’s vision for the future is a world where it is just one of many customers taking advantage of privately-operated (and funded) habitats and spacecraft in low-earth orbit, so it can focus on more ambitious missions to the moon and beyond. The new generation of space entrepreneurs has coalesced around a similar picture, predicting a virtuous cycle: As getting to space becomes cheaper, humans will do more there that adds value to their lives back on earth.

For Musk, developing crew Dragon puts his company on a path to allow humans to live on many planets. The first time his company safely carries humans to space is a major down payment on his promise to retire in a city on Mars. If the erratic billionaire’s public persona is becoming more Willy Wonka than Tony Stark, his space company has never been more successful.

The company is already rumored to be working on a film collaboration between NASA and Tom Cruise, and has signed up to carry astronauts for the space tourism company Axiom, but it’s not clear whether or when these plans will come off. Still, low as they are compared to the other options, seats on the crew Dragon are estimated to be fairly expensive and unlikely to fall far in the near-term.

Even as he praises the results of the program, Dreier is skeptical there will be big returns from business activity in the vacuum of space nearest our planet.

“If it was so obvious, why aren’t we doing it?” he asks. “It’s not purely a function of access. The return is nebulous. We shouldn’t romanticize it. The hardest thing about sending people into space is keeping them alive. You’re bringing a bubble of earth into the harshest imaginable environment. The complexities and issues related to that are going to make it difficult to experiment with human markets in space in a way that makes them cost effective.”

The success of commercial crew, for Dreier, is that a comparatively marginal increase in spending will allow the US to maximize the return on the space station by keeping more astronauts aboard. “That extra person is going to be huge,” he says. “More science, more experiments.”

Other analysts tend to agree that business cases in low-earth orbit haven’t closed—yet. The question is how much the government should and will invest to help get the sector over the line. Alexander MacDonald, the NASA economist recently tapped to manage the troubled national laboratory onboard the ISS, agrees that an extra astronaut will mean more productivity. But he has higher hopes.

“This isn’t just a human spaceflight, it’s the beginning of a whole new phase of operations in low-earth orbit,” he tells Quartz. His hope is that the ISS research will support manufacturing efforts in microgravity, whether of new drugs, lab-grown organs, materials like fiber optic cable, or even new kinds of seeds. One or two successful products could then spur more investment into orbital infrastructure.

It’s worth remembering that the Space Shuttle program came with similar aspirations—a vehicle that would cut the cost of going to space and enable new kinds of activity there. Despite early wins, like flying the first non-governmental astronaut to test a biotechnology manufacturing device, the US government lost its appetite for pushing economic development in space after the Challenger disaster. That experience should put today’s flight in perspective: It’s a small step toward private space’s ambitions. But it could be a giant leap for humanity.

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