Macroeconomic Benefits of Low-Cost Reusable Launch Vehicles

The National Aeronautics and Space Administration (NASA) initiated its Reusable Launch Vehicle (RLV) Technology Program to provide information on the technical and commercial feasibility of single-stage to orbit (SSTO), fully-reusable launchers. Because RLVs would not depend on expendable hardware to achieve orbit, they could take better advantage of economies of scale than expendable launch vehicles (ELVs) that discard costly hardware on ascent. The X-33 experimental vehicle, a sub-orbital, 60%-scale prototype of Lockheed Martin's VentureStar SSTO RLV concept, is being built by Skunk Works for a 1999 first flight. If RLVs achieve prices to low-earth orbit of less than $1000 US per pound, they could hold promise for eliciting an elastic response from the launch services market. As opposed to the capture of existing market, this elastic market would represent new space-based industry businesses. These new opportunities would be created from the next tier of business concepts, such as space manufacturing and satellite servicing, that cannot earn a profit at today's launch prices but could when enabled by lower launch costs. New business creation contributes benefits to the US Government (USG) and the US economy through increases in tax revenues and employment. Assumptions about the costs and revenues of these new ventures, based on existing space-based and aeronautics sector businesses, can be used to estimate the macroeconomic benefits provided by new businesses. This paper examines these benefits and the flight prices and rates that may be required to enable these new space industries.