The Space Shuttle was planned as a transportation system to operate scheduled fights to and from space using a fleet of vehicles with a cargo bay able to accommodate various payloads at reasonable prices. However, the "Space Transportation System" (STS) that was realized has not been attractive to those who were expecting to use its proposed advanced capability. In particular, its high price was a disappointment to their plans. As a result, to date, its customers have been mainly governments and their subsidiary organizations.

When launch services started to be commercialized, the Space Shuttle's launch prices were easily challenged by expendable rockets: Ariane, Proton, Long March and surplus US missiles all offered lower prices than the STS, these expendable launch vehicles being either redesigned or refurbished missile technology. The present customers of these launch services are from the telecommunications industry who reduce their costs by increasing the performance and decreasing the mass of their satellites through improvements in electronics technology. To meet the new requirements of such satellite systems as multiple satellites in low Earth orbits, some new more economical launch systems are being designed. However, despite this, the present market for launch services does not seem to contribute much to reducing the cost of space transportation in the near future.

In fact, according to Koelle, the cost of launch has increased by approximately a factor of 3 over the past three decades (Ref. 1). In addition to not reducing the cost, the present launch market is also not effective in advancing rocket engineering or rocket technology. For example, although it was built long ago during the 1960s, the third stage of the Saturn V vehicle for the Apollo program is still referred to today as a technical model for Single-Stage To Orbit ( SSTO) launch vehicle design. This is an important reason why we must seek other larger and healthier demands for space transportation which will stimulate and encourage the rocket industry as well as new prospective space businesses.

Since the demand from customers is the driving force of industry, we must examine various ideas for space commercialization which demand space transportation services capable of carrying heavy traffic, in safety, and at low prices. The key question is then: "Who are the prospective customers requiring such services?" To find them, we have traced back to the dreams of the pioneers, hoping that the key might be found in earlier dreams which have been abandoned, and excluded from today's plans for future space programs because planners in the past may have judged that these demands were then too difficult for the rocket industry.

It is easy to find many such ideas in papers presented and included in the proceedings of AAS conferences held in the 1960s. For example, the conference held in Dallas, May 1967 on " Commercial Utilization of Space" (Ref. 2) featured discussions on communications and broadcasting, weather-monitoring and navigation, and oceanography and resource-mapping which are all now familiar applications, as well as less well known fields of application such as:

• Space Tourism,
• Space Manufacturing, and
• Medical Research and Applications.

Each of these is part of a major industry on Earth with turnover of the order of $1 trillion per year, based on the demands of society. However, most of them have not been considered seriously except some basic materials-processing experiments. Indeed it was difficult then to conceive what space tourism could be at the time when the most famous space vehicle was the Saturn V weighing nearly 3000 tons to carry only three passengers to the Moon.

In 1968, soon after this AAS conference was held, the idea of the solar power satellite was proposed by Peter Glaser (Ref. 3). The idea was studied intensively by the US government, first under the responsibility of the Energy Research and Development Agency (ERDA), and later the Department of Energy ( DOE) as the Satellite Power System ( SPS). The technical concept of SPS was presented by Glaser again at an AIAA/MSFC Symposium on Space Industrialization held at MSFC in 1976. It is interesting to find a general SPS schedule in which commercialization of SPS was to start recently (Ref.4). However, in addition to launch costs being too high, it was difficult for this concept to attract the interest of the business community at that time because annual world production of solar cells was less than one tenth of 1% of the solar cells to be used for only one unit of the sixty solar power satellites of the DOE's SPS "Reference System" concept.

These concepts were not intended to sell rockets and satellites then being planned, but to expand human activities to the new frontier. Yet today, several decades later, space business activities and plans remain within the capability of existing rockets and satellites. However, we should recognize that present-day space technology is strong enough to expand human activities into extraterrestrial space to create a new frontier. Consequently, we prefer to adopt a new approach to develop new space systems that are required for proposed new businesses. For this the requirements for launch services should be definite and based on known commercial demands, and the evaluation of the proposed activities should be made on the basis of estimated economic feasibility rather than political convenience.

As seen above, the concepts of space tourism and power from space have been ignored by the space community as kinds of "mission impossible" - that is, the payloads were not compatible with the rockets already in existence or being planned, and so they have been forgotten by those who followed this prescribed way of thinking. But today the circumstances of space utilization have changed. As a result of the growth in the number of civilian astronauts, the public have become more familiar with space flight, and now want to travel to space for themselves. At the same time, with increasing public interest in the future of the Earth's environment, power from space and use of extraterrestrial resources are coming to be considered as a potentially important option for the future energy supply needed to continue sustainable economic growth for the whole world population.

These two businesses provide the space industry with a rare opportunity to review the future perspective of space activities to make them of value for the Earth in the next century. Both activities are major established industries on Earth, so that criteria for sound economic evaluation are available; we do not need to assume hypothetical and/or exceptional cases in order to justify extraordinarily expensive launch prices. We can expect that this demand analysis will determine a target for space transportation cost reduction, and consequently the type of transportation which would be best, and when it should be realized. The result of such an analysis will be more constructive than discussions about the preferences of rocket researchers, and guessing when required technology might be developed in the future.

Space tourism has been an ambiguous term when used within government space programs. However, it needs to be given a more precise meaning in order to develop it as a commercial activity. In general, it will be accepted that space tourism can not be applied to astronauts working in orbit. Likewise, an expedition to the South Pole is not tourism either. The reason is that these people's expenses are paid for by their governments. But nor do we consider a millionaire's expensive space flight as tourism, because ordinary people cannot afford it. The word "tourism" should be used to refer to a business activity based on the demand of the general public. That is, commercialization of space tourism must involve the general public as the customers. Like other areas of tourism, market research will be important for the planners of space tourism. However, market research for space tourism is unknown territory both for those involved in space activities and for the business world, because there existed no concept of the market for space tourism that could be used for market research. Thus, until recently space tourism remained literally a popular dream, as it was even early this century.

However, an important question included in preliminary market research for space tourism has wakened people from this dream to the possibility of realizing their own space travel (Ref. 5). That question was "How many months' salary would you be prepared to save for a flight to near-Earth space?" The questionnaires were designed to give a concept of space tourism as a personal service that customers can buy if they want, not as a government service using taxpayers' money. As a result, more than half of those who answered the questionnaires were willing to make a space flight costing more than one month's salary. Considering the great difficulty in increasing the annual budget for the government space program which is only 2000 yen per citizen in Japan (or about 1% of the average monthly salary), we conclude that this market research has been successful in reminding people how much they really wish to participate in space activities of their own, that is, space activities that cannot be carried out using taxes.

One of the results of the research is shown in Fig.1, in which the majority of people who say they want to travel in space are willing to pay from 1 to 3 million Yen. To show the required transportation cost in a traditional measure, the cost of launching payload mass in Yen/kilogram, we assume average passenger mass of 60 kg and typical payment of 1.8 million Yen, giving 30,000 Yen/kg (approximately US$270/kg as of 1997). In practice, the average mass carried per passenger will be higher and the cost of launch should be a fraction of the travel fee paid, so that the launch cost target should be around 10,000 Yen / kg (about US$90/kg).

In the earliest phase of the service, it can be acceptable for the price to be higher, but the market research showed that the number of passengers decreases significantly with an increase in the price. Consequently a high launch price will be acceptable to business only in the early phase of operation of the transportation system designed to meet the cost target, since business is interested mainly in the large-scale market that will be able to repay the initial investment in developing the service.

The feasibility of utilizing extraterrestrial energy and resources has been studied for a long time, and was earlier expected to be a key for space industrialization in the 1970s and '80s. Satellite solar power stations and Helium 3 fuel production on the Moon are typical examples of this category. However, studies on He3 must be omitted from this discussion since nuclear fusion is still the subject of scientific investigation concerning the feasibility of experimental verification of the principle, and so it cannot yet be considered as a candidate industrial power source comparable to the existing technologies of solar cells and wireless power transmission.

The Space Solar Power Station proposed by Peter E. Glaser was intensively studied in the SPS Concept Development and Evaluation Program (CDEP) in the USA in the late 1970s, in the form of a national power system of sixty solar power satellites providing 5 GW utility power per unit. A cost estimation was made by NASA, breaking down the total program by phases from research through construction of sixty satellites, and by system component, following the Work Breakdown Structure (WBS) of the DOE's SPS Reference System (Ref. 6). An early NASA scenario assumed that a decision would be made for commercialization of SPS some time around 1990 after they finished research and development.

The HLLV (heavy-lift launch vehicle) was a reusable two-staged rocket consisting of a booster with a turnaround time of 97 hours and an orbiter with turnaround time of 127 hours. The fleet consisted of five vehicles; thus, this system was a growth version of the current Space Shuttle, and was one of six types of transportation needed for the Reference System. The cost per flight of the HLLV was US$10.1 million, and since each vehicle carried 425 tonnes to low Earth orbit, the cost index was US$24 /kg. A value of US$75/kg to GEO (geostationary Earth orbit) was used for the study without detailed explanation. It is noteworthy that this space transportation was designed exclusively for the SPS program, and it was not considered for general use. Furthermore, the accuracy of this cost estimation would be doubted by the electric power industry because of the fact that the methodology used was developed by Boeing based on their experience of aircraft production, not electricity production.

Since Edison built the first electric power station more than one hundred years ago, power stations have been planned on a commercial basis. The "SPS 2000" strawman is one of very few SPSs that have been conceptualized with emphasis on practical feasibility not only of the technical and engineering aspects but also of finance and marketing (Ref. 8). The basic requirements for the SPS 2000 study are shown in Table 1.

TABLE 1: BASIC REQUIREMENTS OF SPS 2000 STUDY (Ref. 6)

1. Timeframe: Initial construction starts before 2000
2. Technology Options: Commercial and versatile technologies
3. Cost Targets: Competitive with existing small scale electric utilities
4. Orbit & Transportation: Low equatorial orbit using commercial transportation
5. Customers: Utility supply for residents in the equatorial zone
6. Size and Possible Evolution: Basic model of 10 MW microwave power output, allowing system growth in future.

One unit of the satellite was designed to generate 10 MW, considering the annual production of solar cells which was then several tens of MW world-wide. The investment was assumed to be loaned, and the electricity produced would be sold in the form of microwave power to ground-based electric power companies. In order for this system to compete with electricity generated from other types of energy, it was assumed that the microwave power should be priced no higher than 10 Yen/kWh.

As every industry is specialized in a particular field of business, SPS will be that of the power industry. Thus SPS 2000 will undergo test operation as an experimental solar power station, and will be the subject of a business plan as a solar power station to be placed in space. In this case, its development will not start with research and development of technology needed for the system (except for a few critical items) but with a search for availability of existing components that can be purchased at reasonable prices. Furthermore, the system will not be optimized in terms of low mass, high reliability and other factors as spacecraft and rockets are today, but it will be engineered to satisfy the requirements of a commercial power station. It should be noted that although the SPS 2000 satellite will transmit power continuously, the power received at each terrestrial receiver will not be continuous, making the system less cost-effective overall. However, this problem is unavoidable for a LEO system, and is acceptable for a pilot plant like SPS 2000, since an operational system will use several solar power satellites to improve this situation significantly.

SPS 2000 is assumed to be technologically comparable to a power station operated on the ground. The advantage of placing it in space is that the solar energy available amounts to almost ten times more than average terrestrial solar energy. The disadvantages are the remote location and the need for a wireless power transmission system, both of which are unfamiliar to the power industry. Although there are questions about the use in space of solar panels developed for terrestrial use, and about the construction and operation of this new system, preliminary studies have shown that these are not so difficult as to be considered serious engineering problems. Thus, the main factor in deciding whether to use this system is the economic account of the advantages and disadvantages. In simple terms, the ten times greater production of electricity than similar solar panels on Earth must compensate for the additional costs of transportation to space and wireless power transmission.

To perform a simple cost analysis we can use the costs of power stations built by utility companies in Japan as reported in the newspapers. A hydroelectric power station of 100 MW costs 30 billion yen, and a nuclear power station of 1 GW costs 300 billion yen. A coal-fired power station is a little more expensive due to addition of anti-air pollution equipment. Thus we take 300 million Yen/MW as a standard unit cost of commercial power stations. If this is applied to SPS 2000 which is designed to sell 10 MW of microwave power, then it must be built in orbit at a cost of 3 billion yen. As shown in Figure 2, a rough estimation of the cost breakdown is one third each for the solar panels, the power transmission antenna, and transportation and construction, so that the cost for transportation is a fraction of 1 billion yen. Since the total mass to be transported to the site will be about 200 tons, and assuming that construction and transportation costs are equal, the transportation cost requirement will be about 2500 Yen/kg. Although the very expensive space transportation cost is believed to be the main difficulty of solar power satellites, it is noted that the this cost target is a challenge not only to space transportation but also to photovoltaic and electronics industries.

Figure 2a: Transportation Cost Targets For SPS 2000 Based On Current Unit Cost Of Commercial Power Stations

Figure 2b: Transportation Cost Targets For SPS 2000 Based On More Optimistic Financial Plans

In the above we have reviewed two different industries as candidates for space commercialization. From the standpoint of space transportation, space tourism will be mainly concerned with services for human passengers, while power from space will involve a variety of cargoes of prefabricated components and raw materials. The estimation of the cost target for space tourism seems to be more accurate than that for power from space. One reason for this is that there are more factors in the power industry to affect business planning, and more interactions with other industries than in the case of the tourism industry. Another complication is that political factors may be influential in supporting clean sustainable energy like SPS. In spite of such differences in various aspects of these two cases, there is a common feature of their demands for future space transportation, that is, these businesses need real transportation systems, which will be completely different from existing satellite launch systems.

Today, commercial launch vehicles compete with each other to offer low-priced launch services. However, this trend will not lead to the future of true space transportation which we are discussing. The launch market today is the market for launches of satellites for telecommunications and information systems which are spreading around the world. To increase their share of this market, each launch service provider makes efforts to reduce their prices, while providing customers with some financial benefits. But the difference in the prices is only a small fraction of the launch prices, and the cost reduction target remains at broadly the same level, which manufacturers can achieve by improving their manufacturing practices and operational procedures. As a result it is clear that this does not require rocket engineers to produce a new type of space vehicle. On the other hand, many surplus missiles are available at practically no cost, and have their own market which does not need a new form of space transportation. In fact, currently space transportation is categorized as the field of missile technology in the aerospace industry. Therefore, we conclude that the demands for large-scale space transportation which we have identified cannot be satisfied by existing launch vehicle development plans that are based on vague feelings of future requirements of current satellite operators and government space agencies.

Recently there seems to be some optimism about the future results of current efforts aimed at reducing satellite launch costs by as much as 90%. Unfortunately, we cannot find any promising new market for launch services at a price one order-of-magnitude lower than present-day launch prices. Consequently the number of launches will not increase significantly, and total launch revenues may fall. Furthermore, because of the shortage of launch demand, such vehicles will not be flown sufficiently frequently to generate the repeated operating experience that could enable costs to be reduced further. Thus the development cost of even a reusable launch vehicle which succeeds in launching satellites at only 10% of today's launch costs is unlikely to be recovered, because the market for satellite launch is too small. Thus such vehicles cannot be attractive for commercial investors, and can only be government projects paid for by taxpayers. As long as launch service prices remain at this level, space activities will continue to absorb capital resources, rather than increasing them as commercially profitable industries do. Furthermore, because of the long time taken to develop such a vehicle, it would delay the possibility of space activities becoming profitable for another generation - an economically undesirable policy, and a risky one due to the weak public support for traditional space activities. At a time when govern-ments are trying to reduce their deficits, it will surely become more and more difficult to persuade them to continue to support unprofitable space activities.

By contrast, a two-order-of-magnitude reduction in launch costs will open the new markets of space tourism and power from space which are potentially large enough to make space activities profitable. The demands discussed above indicate that future space transportation must be designed, built and operated as a transportation system designed for normal passengers and cargo - not in order to launch present-day spacecraft which have been developed specifically in order to be launched on top of a missile in place of a warhead.

To respond to these demands, vehicle engineers must change the traditional philosophy of space transportation by innovative rocket engineering that makes full use of the accumulated knowledge and experience of design, manufacturing and operation of the global air transportation industry. However, this does not mean developing a winged spaceplane that flies like an aircraft, but building spaceships that use existing air traffic facilities to eliminate the expensive and inconvenient ground support systems used by traditional rockets. This is a more logical and fruitful way of advancing space flight technology than trying to analyze theoretically which is best, winged or ballistic, vertical take-off or horizontal take-off, and so on. Discussions about the best space vehicle configuration should be based on satisfying practical demands of important commercial users, as discussed here.

The above demands require not new invention but rather innovation involving existing engineering knowledge and technology which are currently used separately for rockets and airplanes: to innovate space technology using knowledge of airplane design and airline operation. As shown by the progress of aviation, transportation costs are reduced not by achieving low vehicle development costs, but mainly by improvement of vehicles' operability. The development costs of the Boeing 777 and Ariane 5 are roughly similar, but their cumulative operations, and operating revenues, will differe by many orders of magnitude. And since reduction of transportation costs will depend mainly on reducing the operating costs of reusable rocket vehicles, the most relevant guide to achieving this is aviation practice. Consequently rocket engineering must follow such fundamental aviation practices as:

1. For VTOL (Vertical Take-Off & Landing), single-stage vehicles are superior to two-stage vehicles, since the constraints on the operation of two-stage vehicles are greater than the disadvantage of single stage vehicles' lower payload per flight. For HTOL (Horizontal Take-Off & Landing), SSTO is impossible with known technology.

2. Vehicles must be re-flown hundreds of times in order to generate the statistical data which guarantees reliability. Suitable "time between overhauls" (TBOs) can be calculated for each component of the vehicle, and every aspect of vehicle turnaround and maintenance can be standardized, streamlined, and its cost minimized.

3. Flight tests must be incremental, rather than flying to orbit on the first flight like an expendable rocket, in order to minimize risks. For example, the X-15 rocket-powered hypersonic flight-test vehicles flew progressively higher and faster over nearly a decade.

4. The vehicle must be designed to have continuous intact abort capability. In order to receive certification, passenger aircraft must be savable at any phase of flight. A period of even a few minutes during which recovery from failure is impossible (as in the space shuttle) is not acceptable.

5. Piloted operations are safer than unpiloted operations. While the launch industry consider crewed vehicles more dangerous than uncrewed ones, this is the opposite of aviation (and indeed all transportation industries). These industries' commercial success is evidence that their way of thinking is correct, and the space transportation industry is mistaken.

6. Vehicles must be designed primarily for passenger carrying. Market research shows that for space transportation, as in aviation, the major payload will be passengers. In commercial aviation most cargo aircraft are modified versions of passenger aircraft.

Achieving the target of reducing launch costs by 99% seems very challenging. However, fortunately, a series of designs for low-cost VTOL SSTO launch vehicles have been published over the past 30 years although never implemented (Ref. 9). Starting in 1993, the Transportation Research Committee of the Japanese Rocket Society has drawn on these studies to prepare a preliminary design of a fully reusable, 550-ton GLOW (Gross Lift-Off Weight), SSTO VTOL launch vehicle for passenger service, the " Kankoh-maru" (Ref. 10). Due to the strength of potential demand for such vehicles, it is estimated that its launch costs could fall below 20,000 Yen/kg (about US$180/kg) to low Earth orbit, even funded entirely as a commercial project. Those who have worked for this study over the past four years have been greatly encouraged by the favourable reactions of foreign experts including Hunter (Ref. 11), Gaubatz (Ref. 12) and Koelle (Ref. 13). All three consider the design of Kankoh-maru to be realistic, and its production and scheduled operation for both orbital and sub-orbital transport to be feasible using existing technology and know-how. Koelle has even estimated the development cost of Kankoh-maru as significantly lower than the estimate by the JRS Transportation Research Committee (Ref. 13). In view of the much greater accumulated aerospace engineering experience in Europe and USA than in Japan, this seems likely to be correct.

Being designed specifically to serve markets that are known to be large enough to generate large-scale revenues if the target price level is reached, the development of a vehicle such as Kankoh-maru is economically much more desirable than vehicles with less ambitious cost targets. The positive evaluation by world experts suggests that further work on this design supported with appropriate resources could soon be successful in achieving the long-awaited transformation of space activities from being a burden on taxpayers to being a popular and profitable part of the aerospace industry.

Among many candidates once discussed for space commercialization, space tourism and solar power satellites have been re-evaluated from the standpoint of both technical and economic feasibility in order to give transportation cost targets that meet practical business requirements. These businesses' requirements for rocket vehicles are concerned with passengers and general cargo, which are very different from the payloads of today's launch market. The space transportation cost targets for these two businesses are 10,000 Yen/kg and 2500 Yen/kg mass of payload for space tourism and solar power satellites, respectively. In view of the difficulty of estimating the cost more accurately at present, these cost-targets can be considered to be practically the same, and to require a reduction in current rocket transportation costs by about two orders of magnitude.

Current efforts to reduce satellite launch costs by 90% are therefore not sufficient to motivate new industries to start space activities. Such satellite launchers continue to be an extension of missile technology, whereas what is needed is for the aerospace industry to innovate rocket vehicles using experience of aircraft production and operation in order to open the business frontier of space and repay taxpayers' accumulated investment. Normal industries such as air transport, hotels and electricity earn huge revenues from the general public by providing services that millions of consumers wish to buy, and the profits that they earn more than repay the investment that the industries absorb, thereby creating self-sustaining employment and adding to society's capital wealth. But 40 years after the first satellite launch the space industry is still a heavy absorber of capital - currently about $25 billion per year of taxpayers' funds around the world. With such huge investment every year, normal industries would create permanent new employment for about 500,000 more people per year cumulatively, and would generate a permanent stream of profit growing by several $billions every year enriching society. Our perspective of aiming at the commercially required cost target for space transportation will give a chance for the space industry to cease being a capital absorbing activity and cotribute to economic growth as a normal industry.

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