Commercial Space Transportation Study

3.2 Space Manufacturing

3.2.1 Introduction/Vision

The orbital assets are routinely serviced by regularly scheduled launch vehicles with maneuverable upper stages that provide autonomous rendezvous and docking for orbital delivery of unprocessed samples and constituent supplies. Return capsules, containing processed products, detach from the orbital asset and, following controlled reentry into the Earth's atmosphere, deliver these products to reception centers on the ground.

Dedicated ground-based facilities provide both prelaunch and postlaunch processing functions. Ground-based biotechnological and pharmaceutical industries have developed drugs and genetically engineered vaccines based on the processed materials provided by the space manufacturing and processing orbital assets. These drugs and vaccines have eliminated many of the major diseases prevalent in the 20th century.

Enhanced nutritional foods, also derived from base materials produced in space, have been combined for the elimination of disease. Human life spans are now extended to 100-plus years.

Genetically engineered substances based on materials produced in space have eliminated many of the chronic human conditions derived from genetic disorders such as multiple sclerosis, cystic fibrosis, and Alzheimer's. The effects of aging on the human body have been controlled by discovery of the means to stimulate cell replacement and regeneration of vital human-life-sustaining-and-controlling enzymes.

Electronic materials derived from space produced base materials have contributed to the existence of super-high-speed processing, ultralow-energy-consuming, super-enhanced data storage capability chips and devices. These items have enabled the information processing and automation industries to develop to an unprecedented scale to enhance the quality of life. Environmental improvements have been enabled by bioremediative products developed from base materials produced in space such that major concerns of uncontrolled environmental degradation have now been eliminated.

The orbiting space manufacturing and processing asset also provides an automated research facility for the further development of new materials and processes and the advancement of knowledge of physical and biological processes subject to limitations imposed by Earth-based gravitational effects.

Many hundreds of thousands of personnel are employed by industries whose base materials and processes are supported by the space manufacturing/processing system facilities.

3.2.2.1 Introduction/Statement of Problem

To establish an estimate for the existing business base of the subject market areas, certain correlations were assumed wherein definitive DoC information in SIC categories of related business areas were correlated and collected as representative of the study areas.

The U.S. business base for materials processing was compiled from the SIC categories of semiconductors, instruments, and catalyst/separation and integrated to the area of electronic materials as derived from a report entitled International Electronic Materials (1991) conducted by Peat Marwick Inc. for the Center for Space Processing of Engineering Materials at Vanderbilt University.

The base estimate for university/industrial research, which also includes federal expenditure, was derived from a study conducted in 1992 by the Battelle Memorial Institute. Manpower estimates associated with each category were derived either directly from DoC-published data or estimated based on average rates for appropriate labor categories.

The term "space manufacturing" is somewhat misleading, since it suggests an industry whereby an orbital asset (with an inherent microgravity environment) is used to support the making of "production" quantities of items by controlled processing of raw materials. These items or products assumed to be characterized by structure and properties that cannot be duplicated in the unitary gravitational environment on Earth.

The misconception basically concerns the quantity of processed products considered to be of manufacturing production magnitude. For example, some pharmaceutical materials derived from space processing and intended for the treatment of critical human conditions have values up to $15 million per pound (i.e. tissue plasminogen activator-TPA).

It would be useful at this point to summarize a sample of the potential advantages and products that may be produced in a microgravity environment.

a. Immune response understanding leading to viral infection antibodies or vaccines;

b. Synthetic production of collagen for use in constructing replacement human organs (e.g., corneas);

c. Manipulated differentiation of plant cells to produce desired chemicals (e.g., Taxol);

d. Production of targetable pharmaceuticals (cancer cures);

e. Protein crystal formation for structure identification (structured biology);

f. Protein assembly;

g. Growth of large pure electronic, photonic and detector crystal materials (computer chips, quantum devices, infrared materials);

h. Ultrapure epitaxial thin film production in very high vacuum (e.g., Wake Shield Facility);

i. Production of perfect solid geometric structures;

j. Manufacture of pure zeolite crystal material for filtration applications (pollution control);

k. Manufacture of polymers with unique characteristics;

l. Electrophoresis for separation of microscopic components within fluids.

The unique characteristics associated with an orbital microgravity environment have been promoted by NASA for some years and have involved international cooperative efforts with Europe (ESA) and Japan. Initial efforts in the late 1980s involved suborbital sounding rockets (Consort and Joust), which provided typically minutes of microgravity exposure.

A KC135 aircraft has also augmented this capability with manned minutes of microgravity exposure. More recently shuttle-based carriers such as Spacelab (a European Space Agency carrier) and the series of U.S. Microgravity Laboratories have provided access to space for experimental programs. These shuttle flights are, of course, manned and typically provide up to 12 days in orbit.

A further shuttle-based access capability is the so-called get-away special (GAS) payloads. These facilities effectively are small and self sustaining and occupy cargo bay capacity remaining after major payloads are installed.

Spacehab has been developed commercially as an annex to the shuttle and to date (January 1994) has flown once with a complement of 22 individual experiments. The above shuttle-based carriers that provide microgravity access are integrated within the parent vehicle and provide an orbital duration of 12 days.

The Europeans have flown an orbital asset known as EURECA, which provides a microgravity exposure of about 9 months. This satellite is equipped to support long-term experiments and is both launched and recovered by a U.S. shuttle.

A further NASA/HQ-sponsored proposed program, pioneered by the Universities Space Research Association (USRA), is the student explorer demonstration initiative (STEDI). This initiative is promoting new exploratory space science projects for science graduate students within academia.

The projects are individual experiments typically about 100 lbm mass, which will be combined to yield a launch payload of about 450 lbm. The experiments are designed to support space-related research in areas such as astrophysics, space, earth, life, biomedical, and microgravity sciences.

The payloads are planned to be placed in orbit using a multiservices launch vehicle (MSLV) such as a converted Minuteman II missile. Current STEDI plans are to conduct three payload launches in 1996, all to LEO polar orbit, for which NASA/HQ has allocated funding of $24 million. Future plans project an escalation to 25 launches per year from 2004 through 2020.

The USRA believes that if the STEDI program is successful it will be able to establish a steady stream of dedicated space flights for research and development at universities, government laboratories, and commercial research centers.

a. Conduct internal research to obtain an appreciation of the potential advantages available to the market areas in this category as afforded by space applications and potentially serviced by a commercial space transportation system (CSTS);

b. Conduct research to identify potential primary and secondary contacts;

c. Conduct a comprehensive telephone survey soliciting potential interest in a future CSTS that would enable commercial activities in space profitably relevant to each market area

d. Follow up immediately by FAX with a written introductory letter explaining the purpose of the CST study and defining the cooperating informal alliance members;

e. Conduct further telephone solicitation of selected primary contacts with request for interviews to discuss responses to a list of CSTS-related questions. These questions designed to evaluate the potential of space-based applications for the individual market areas making use of a CSTS. The questions are as follows:

1. What is the maturity of users' space application?

2. What are payload form factors?

3. What infrastructure and support to user must launch system company provide?

4. What is end user market infrastructure?

5. What changes or improvements are needed in the market infrastructure to reduce costs of space-produced products?

6. If users are performing experiments now, when will they begin producing commercial products in space.

7. What are current and near-term costs associated with using space?

8. How sensitive is user demand to launch system cost. How many more times will they use space if launch costs are reduced?

9. What decision-making process is used to decide on the use of space?

10. What are titles and names of executive managers who are making business decisions to invest their companies' resources into producing products in space?

f. Follow up telephone solicitation for interviews by FAX with a summary of the CSTS survey, the list of pertinent questions, and a matrix of the market areas under evaluation;

g. Conduct face-to-face interviews with responsive primary contacts using the above questionnaire as the basis to guide detailed discussions;

h. Record the indepth responses obtained with field research reports and summarize the overall response;

i. Summarize and analyze the results of the market survey in appropriate reports and estimate the business potential for the space manufacturing/processing general area.

The majority of these companies (98%) provided zero response. The remainder each sent a polite letter declining interest. We concluded that whatever advantages space may hold for the evolution of the biotechnology industry, none of the letter recipients were aware of it.

All primary and secondary contact listings, contact reports, communications, and field research reports have been stored in an accessible database with comprehensive search and locate facilities. This information is a valuable resource pertinent to the overall objectives of the CSTS and represents a current realistic record of the reactions of industry and selected NASA-sponsored agencies to the concept of a commercial space transportation system used in support of commercial space manufacturing and processing activities in space.

The European Spacelab and the U.S. commercially developed Spacehab are both designed as an annex to the shuttle and provide facilities for similar experiments.

The 17 NASA-sponsored and partially commercially supported Centers for the Commercial development of Space (CCDS) are the primary means of access to space.

The following dialogue is an assessment of characteristics of the current access to system which have been advised to the CSTS researchers in direct interviews as being factors which discourage the near-term commercial involvement in microgravity-related space-based research and development.

These factors are summarized under market con drivers and the subsequent section reports on a potential launch services system that would stimulate the long-term development of commercial space activity.

Drivers Con:

a. Government (NASA) ownership and operation of the only access-to-space transportation system currently suitable for support of space manufacturing/processing is totally incompatible with commercial ways of doing business;

b. The NASA bureaucracy associated with flight certification of hardware/software and sample materials is a major impediment to commercial utilization of current access to space;

c. The extended time scale between decision of intent and the actual flight event of a shuttle experiment is unacceptable to potential commercial users;

d. High costs of commitment of staff/materials from experiment conception to actual flight even though the actual flight cost is zero by working through the CCDSs;

e. Shuttle touch-down location is subject to somewhat unpredictable local weather conditions, particularly at KSC. This leads to uncertainty and therefore redundant recovery team planning for the timely receipt of processed samples. This represents a risk for processed samples of limited lifetime and could introduce unpredictable sample degradation. This situation is unfavorable for a commercial operation;

f. The shuttle also has a history of experiencing delayed launch schedules. These delays represent a risk to sustained funding and the integrity of form for unprocessed sample materials, which could effectively negate the experimental objectives. This also is a significant risk to a commercial operation;

g. Shuttle manifests are subject to change at the discretion of NASA management. While we recognize that these manifest changes are managed with responsible integrity and due process with respect to priorities, the inherent uncertainty of flight date commitment is a cost and operational risk to a commercial customer;

h. Astronaut crew rotation for shuttle flights incurs a burden on retraining to ensure that appropriate expertise is available to conduct processing experiments, particularly if these are repetitive experiments. The benefits of manned versus autonomous experimental management has been quoted as worthy of a critical trade study. The retraining burden is certainly a cost disincentive to commercial involvement;

i. An inherent requirement within experimental programs is timely repetition subject to known variation of control factors. This requirement is difficult to implement due to uncertain manifests and change of associated onboard personnel. Recognizing that these random factors are perhaps inevitable with the shuttle-based program, they do, however, represent a further unfavorable factor regarding commercial involvement;

j. The nonavailability of regular routine flights committed to materials-processing experiments is a further disincentive to commercial and noncommercial involvement. This nonavailability is understandable due to the competition for access to space coupled with the limited number of annual shuttle flights;

k. Shuttle flights inherently involve human presence within the microgravity environment created by orbital precession. While this is an obvious advantage with respect to the presence of human intelligence, the microgravity environment is subject to unpredictable local disturbances due to crew motion. Some concern has been expressed by some respondents to the CSTS survey that these disturbances could affect the outcome of experiments. In addition, the possibility of undisciplined or accidental activities could also impact experimental processing, particularly in early phases of sample growth. The current necessity of human presence has been advised as a potentially unfavorable factor;

l. Limited time on orbit obtainable via shuttle-hosted experiments is a major problem. The maximum duration flight to date has been about 12 days, whereas potential experimental users have strongly advised that 30 to 90 days would be much preferred. Some experiments cannot tolerate 90 days; the selection is a function of the material being processed;

m. The issue of proprietary rights to experimental data derived from zero-cost access to space provided at public expense is a troubling concept (i.e., free rides if the experimenter is affiliated with any one of the 17 CCDSs).

a. Even direct approaches to some selected CCDSs by CSTS researchers have failed to solicit specific information with reference to positive results of microgravity experimentation. The author is of the opinion that resolution of the above issues and perplexities would considerably enhance progress towards greater involvement by commercial entities, with subsequent long-term beneficial results;

b. The cost of access to space via the shuttle is perceived by commercial industry to be prohibitively high, particularly when the potential return on investment appears to be illusive. Even in the scenario of free rides, obtainable as an affiliate or member of one of the CCDSs, the cost of long-term involvement in preparation and certification of flight hardware and samples is a major factor.

Perhaps the Spacehab carrier situation is a good example. The rental cost of each locker is about $1.8 million and preparation and approval time duration is about 18 to 24 months. As noted previously, this time commitment is a significant additional cost to the user. The effective cost for orbital flight is between $6-7K per hour, which is almost two orders of magnitude above the cost of ground-based research.

The locker price is a function of return on private capital investment raised to design and develop this commercial shuttle annex carrier and also the cost charged by NASA for each flight.

As an example of manifest changes, the second flight of this carrier has been slipped due to the Hubble repair mission and delayed from late 1993 to early 1994.

c. The amount of electrical power available to support shuttle annex experiments is also limited. The result is that activities of a commercial scale cannot be accommodated, at least with reference to the growth of industrial-size electronic material crystals.

Drivers Pro:

It is essential that NASA's commitment to the support of microgravity experimental projects be aggressively continued and, if possible, expanded regardless of the limitations relative to commercial applications that have been previously described. The probability of achieving breakthrough enabling technologies will be enhanced only by sustaining or preferably increasing the number of flight opportunities.

An aggressive commitment to the publication of experience and results achieved through microgravity processing will stimulate more widespread interest within the general but relevant industrial base. A recurrent theme of feedback derived from contacts with commercial companies was a lack of knowledge as to what had been achieved to date.

NASA's support of the Spacehab and Comet programs is also an essential near-term stimulant to long-term commercial involvement.

Following are the essential characteristics of a potential launch services system that, if available, would fully support a significant commercial space manufacturing/processing-based industry.

a. Commercial ownership and operation of the access-to-space transportation system available to support space manufacturing/processing is essential to support commercial utilization and, therefore, development of the market;

b. Routine access to space, similar to flight travel opportunity offered by the commercial airline industries, is required;

c. Elimination of extended time scales between the decision of intent and the launch-to-orbit event would be more suitable for commercial users. This would effectively maximize the efficiency of staff commitment and reduce the overall cost of involvement in space-related activities;

d. The postflight delivery of processed samples or products to a fixed known location without deviations would be favorable to commercial utilization;

e. Launch on schedule must be an essential characteristic of the space transportation system;

f. The launch of a given payload to an agreed schedule with zero probability of manifest changes is an essential requirement for commercial business operations;

g. An unmanned, autonomous system for payload launch, on-orbit processing, and processed sample or product return is much preferred by respondents interviewed by the CSTS researchers. The astronaut corps would have no part in this system and requirements and cost for repetitive training would therefore be eliminated;

h. Routine airline-type operations would enable the timely repetition of space processing activities;

i. A commercial space transportation system would provide regular routine flights dedicated to materials processing requirements;

j. The potential degradation of the orbital microgravity environment by human presence would be eliminated with an autonomous system. This would require the development of automated sample-processing facilities within the orbital asset;

k. The commercial system must provide a minimum of 30 days and a maximum of 90 days access to the orbital microgravity environment. This effectively means a regular return of processed samples achieved by either an on-orbit resident return capsule (s) or a recovery capsule launched from the ground with rendezvous and offloading capabilities;

l. Proprietary ownership of data derived from space applications would be absolutely guaranteed with a commercially owned and operated access-to-space system wherein launch, orbital processing facilities, and product return capsule services are obtained under standard contract conditions;

m. A low-cost access-to-space system is an enabling essential characteristic for commercial market stimulation and support. Development of the acceptable cost is addressed elsewhere in this report;

n. An orbital asset designed specifically to maximize the electrical power available for microgravity processing is also essential. A sun synchronous, LEO dedicated, autonomous processing asset would provide the necessary facilities.

The service module will be designed for at least 5-year on-orbit operations and will be configured with standard guidance, navigation and control functions; automated rendezvous and docking functions; command and communications functions; environmental control capability; high onboard continuous power systems; and an autonomous product module exchange facility for onload/offload of, respectively, unprocessed and processed product material subunits.

The service module will be placed in a polar sun-synchronous orbit to enable maximum onboard electrical power availability (estimated as 20kW) to support comprehensive product processing. A trade study has been conducted to compare the placement of the service module at a high-inclination orbit versus a low-inclination orbit (app. C.1) with the result that the polar orbit is preferred.

The orbital service module will be serviced at 30-day intervals via a launch system that will provide access to polar orbit for an approximately 1,500 lb recovery module that will carry a maximum of 3,000 lb of product and containment support modules.

The recovery module chase vehicle will be designed with autonomous rendezvous and docking capability (with ground support back up) such as to dock with the orbiting service module.

Following successful docking of the recovery module with the service module, the unprocessed product materials with support containment will be offloaded to the service module and the processed products will be onloaded to the recovery module. The latter module will then detach from the service module and deorbit to reentry for recovery at a fixed preplanned land-based site within the continental United States.

A recovery site team, equipped with helicopter services, and queued by a dedicated ground-based recovery module tracking system, will search or, locate, recover, and deliver the recovery module containing processed products to a dedicated recovery site facility (RSF). This RSF will be equipped with all necessary facilities to preserve the functional integrity of the returned processed products prior to pickup by the appropriate system customer.

Recovery modules will be refurbished on a routine basis and delivered to the launch vehicle site for integration and reuse. The disposal of the orbital service module following completion of useful service life is an open issue.

Possibilities include a deorbit rescue mission using an unloaded recovery module or perhaps a shuttle rendezvous and recovery. The former is preferred because of its system-independent nature without reliance on government-controlled assets. The orbital service module will be monitored and controlled during routine autonomous processing operations and possibly during rendezvous operations using a ground-based single program operations center (POC) positioned at a high geographic location (possibly Alaska).

In summary, the mass of the orbital service module is estimated as 4,000 lb, the recovery module as 1,500 lb, and the 30-day periodic product specific payloads as 3,000 lb. These estimated mass budgets are predicted as adequate to provide the necessary space manufacturing/processing facilities and service capabilities and effectively define the maximum payload weight for the commercial launch system as a maximum 4,500 lb to a 98-deg sun-synchronous polar orbit.

As discussed at length within this report, the current NASA-dominated system of providing access to a microgravity environment is not appropriate for this long-term commercial use. The current system does, however, (with some limitations) support the necessary preceding process of experimentation and demonstration of the potential benefits of microgravity processing.

To perform the business assessment of a future commercial space manufacturing/processing system, it has been assumed for convenience that the total system will be designed, built, owned, and operated by the space launch company or consortium of companies.

It has also been necessary to postulate an enabling system configuration that contains the essential subsystem elements and operating scenarios derived from discussions held with users of the current NASA-sponsored systems and also potential future users.

The business analysis performed as above was kept at a fairly simplistic level. Since the input data were speculative and business operations, which dictate cash flows, are not well defined, complex analysis techniques would not add value to the results. The criteria for an acceptable investment opportunity was a 20% internal rate of return (IRR). A 20% hurdle rate is consistent with the level of investment and speculative nature of the programs. However, increases to the risk-free rate in the time frame of the analysis may warrant a higher hurdle rate.

R&D investments were separated into two parts, R&D and fixed asset-related R&D. R&D was treated as a sunk cost and recovered through future profits. Fixed-asset design was assigned to the asset value and depreciated over the useful life of the asset. Straight-line depreciation was used, although an accelerated method is normally used for tax and book purposes. The rationale behind straight-line is twofold, elimination of the need to classify assets and the ability to match the depreciation period to the true (assumed) useful life of the asset. The analysis assumed the businesses to be going concerns (i.e., no recoupment of residual fixed asset value at the end of the analysis period).

A significant factor in the analysis is whether the business entity is a standalone company or part of a larger firm. The tax implication is loss carry-forward. A standalone company will roll forward losses (investment) and offset future tax liabilities, whereas a division's or subsidiary's losses will offset its current year tax liability (assuming the parent shows sufficient profit). The effect of being a division is an alleviation of the cash burden during the R&D phase. The model used herein assumed a standalone entity and associated loss carry-forward.

Net working capital adjustments were excluded from the analyses. Details of the payment schedules were not clearly defined, so cash receipts were assumed to coincide with expenditures and profits were paid upon launch.

A limited number of value-added companies are also involved and provide individual materials processing and containment equipment. The companies usually act as support agencies between the user and the CCDSs.

Other than long-exposure duration experiments and certain untended get-away special canisters, each of the microgravity processing experiments is human tended by the shuttle crew with associated repetitive training requirements.

An exception to the above space access logistics involving the CCDSs is the commercially developed Spacehab processing module. Herein the user negotiates with the commercial Spacehab company, which in turn deals directly with NASA for shuttle manifests. It is understood, however, that to date the majority of users for Spacehab locker facilities are in fact also NASA centers.

The COMET program managed by the University of Tennessee Center for Space Transportation and Applied Research (CSTAR) is currently in a development stage as a small-scale (~300 lb of experiments) freeflyer-based system. This is an unmanned alternative to the shuttle but is also sponsored and funded by NASA.

This overall current NASA-dominated infrastructure is perhaps the only currently available and sustainable U.S. system to support experimental exploitation of microgravity processing but for the reasons discussed in the Drivers Con paragraphs of the "Market Evaluation" above, this system is not appropriate for profitable large scale commercial exploitation.

Based on feedback from CSTS research interviews, an infrastructure necessary to support commercial utilization of the benefits of microgravity processing is believed to be that of commercial ownership and operation devoid of government involvement other than as a customer and a regulating agency using commercial standards.

An upgraded MIR station and the ALPHA station will be available as manned facilities assumed to be supportive of fundamental research-oriented activities but with access availability for microgravity processing shared with other life support and space science-related missions.

The users for the large-scale commercial space manufacturing/processing will interface with the CSTS commercial launch system either directly or through value-added commercial companies that provide individual customized materials processing and containment capsules.

3.2.3.1 Contacts

3.2.3.2 Summary of User Inputs

Instrumentation Technology Associates

Space Industries, Inc., is the principal industrial partner for developing the WSF flight hardware. A fourth flight would demonstrate pilot commercial operations, but will require additional industrial funding. The WSF is a proof-of-concept (Mark I) demonstration program. Dr. Ignatiev has plans for a follow-on program (Mark II), that will demonstrate commercial approaches to thin-film deposition process on GaAs wafers.

The University of Houston Business School estimated that a free-flyer Mark II facility with a 5-year operational life would be economically feasible. For commercial operations, approximately four resupply flights per year would be required. Each flight would deliver approximately 100 lb of materials for processing and return an equal weight of finished product to Earth. The facility would cost about $30 million to build.

University of Alabama-Huntsville

a. Reducing the launch vehicle cost by a factor of three to $6 million will make it economically possible to sell space manufacturing to users.

b. The benefits would include increased launch rates.

c. Lower operating costs for space manufacturing will cause innovation.

Syntex Discovery Research

3.2.4.1 Transportation System Characteristics

The launch vehicle must provide a launch each 30 days, with late access of 12 hours for selected subunits of the total payload wherein inactive time delay would be critical to the integrity of the unprocessed products. The vehicle lift capability must be at least 4,500 lb to LEO at 98 degree inclination. This total payload mass to include 3,000 lb of product and containment support modules and also the 1,500 lb recovery module, which provides the controlled on-orbit maneuver and rendezvous functions for delivery to the orbiting service module.

The delivery of payload to the preferred sun-synchronous orbit at high inclination will require highly reliable launch operation timelines, highly accurate guidance, and staging and precision range-tracking instrumentation.

The customer base for the space manufacturing/processing system is envisioned to be from nonaerospace industry, such as semiconductor materials manufacturers, biotechnology, and pharmaceutical manufacturing/processing companies. The launch system company, therefore, must provide a full-service capability both before and after launch and will probably encourage the significant involvement of space-experienced value-added companies as primary interface agencies.

To accommodate the routine launch on a 30-day cycle of 3,000 lb of unprocessed payload comprising possibly 20 to 30 subunits of individual product/containment modules will require a significant scheduling, multimanifesting, and interface effort. A significant team of dedicated staff will be required to achieve this previously unprecedented tasking involving sustaining engineering, planning, and program management.

Prelaunch payload processing facilities will require careful planning to accommodate the necessary timely support to multiple subunits of the total payload. Commonality of product processing and containment modules will be an essential feature to support the relatively short preparation cycles for individual integrated payloads.

Preparation of the recovery module to be carried with each flight will commence following each return flight containing processed products. A refurbishment facility will be dedicated to this task and should probably be located at the actual launch site. Postflight payload storage and holding facilities will be needed located at the fixed recovery landing site. This facility will enable the tasks of both dismantling the composite processed product and containment modules from the recovery module carrier and subsequently storing of each module within suitable environmentally controlled enclosures prior to customer pickup.

The entire emphasis of the space manufacturing/processing system will be to provide regularly scheduled, service-oriented access to microgravity space with minimum bureaucracy, maximum throughput efficiency, and minimum cost.

Spacehab is the only operational commercially developed system currently available to support microgravity processing. The cost of such access equates to about $30,000/lb based on a 60-lb locker priced at about $1.8 million for a 10 to 12 day duration on orbit with a lead preparation time of about 18 to 24 months. Revisit periodicity had previously been planned for two Spacehab flights per year, but recent Congressional budget cuts have reduced this to only one flight per year.

It is believed that to date NASA has rented all available locker space for the second and third missions with no individual U.S. commercial reservations. This arrangement has been described as an "anchor tenancy," which ensures that the commercial developers of Spacehab (Spacehab Inc.) will be able to recover the construction costs of flight modules.

The issue of elasticity concerning price versus demand has therefore been estimated based on the assumption that the near-term experimental flights dedicated to microgravity processing will lead to technology breakthroughs. Furthermore, it has been assumed that these breakthroughs will receive appropriate publicity and therefore stimulate commercial interest in this activity. Products will be subsequently created that will have significant commercial potential and therefore will provide a commercial business incentive.

Current prices for access-to-space vary considerably depending on the approach used. The shuttle-based GASs intended as standalone, self-contained canisters cost about $10,000/canister. For a shuttle flight with about 40,000 lb capacity and price quoted as $400 million to $650 million per flight, the effective cost would be between $10,000/lb and $16,250/lb.

The Spacehab vehicle, operating as a shuttle annex, is priced at $30,000/lb. This price is understood to include markup intended to recover the commercial cost of vehicle development. The CCDSs managed COMET free-flyer program (currently in development) quotes a price of $32 million per flight, which involves about 300 lb of experiments and is therefore $100K/lb. This higher price, however, provides up to 30 days of microgravity environment exposure. As stated previously, the access cost to space is priced at zero cost for experimenters seeking access through the CCDSs.

Further reduction to 10% of current prices would yield a factor of between 5 and 6 increase in demand. A reduction in price in the range of two orders of magnitude (i.e., $300/lb) would increase demand by a factor of between 10 and 20. The net effect is therefore a nonelastic market. That is, the differential reduction in price exceeds the differential increase in demand, at reasonable economic prices (e.g., greater than $1,000/lb) which results in an elasticity of less than unity.

The projected flight rates for the space manufacturing/processing market have been estimated based on the assumption of continuing government-sponsored/funded experimental activities, technology breakthroughs, and the future availability of a service-oriented system with capabilities and operating characteristics as suggested by CSTS research contacts.

A highest probability baseline rate of 12 flights per year at about $1000/lb has been predicted to correspond to the requested minimum 30-day on-orbit duration. A slow growth has been assumed out to about 7 years following initial operating capability as being a conservative increase in utilization. This low-cost access is probably not achievable, even with government investment, if the launch company must assume replacement costs for the assets with limited lifetime, that is, the orbital service modules and the recovery modules.

The minimum projected cost for access that includes replacement of these assets has been evaluated as about $6000/lb. The high probability rate of 6 to 8 flights/year at current prices is a projection derived from commercial utilization stimulated by technology breakthroughs as potentially possible from the ensuring experimental programs but with demand bounded by relatively high-cost access.

Low probability rates are very unlikely to be realized in practice but have been estimated based on conservative upwards scaling of the higher probability cases.

The overall flight rates shown within the composite mission models demonstrate the potential impact on this specifically designed space manufacturing/processing system that a space business park may have, that is, certain users may prefer to utilize the latter manned facility perhaps for activities involving living organisms or animals or for activities that are less predictable than routine production processes.

It should be noted, however, that the threshold access cost to stimulate significant space business park activity is around $500/lb, which may well require application of leapfrog technology such as is predicted for a reusable transportation system. In that case, the same technology could be applied as the launch service element and the recovery carrier for the autonomous space manufacturing/processing system, thereby considerably modifying the effective access cost for this system also.

The primary sources contacted for the Space Manufacturing/Processing segment of the CSTS included the following list of organizations and individuals.

John Cassanto, President Ulises (Al) Alvarado, Sys. Eng. Mgr. Instrumentation Technology Associates (ITA) Exton, PA 19341	Louis Hemmerdinger Dr. David Larson Grant Hedrick Grumman Corporation Bethpage, Long Island, NY 11714
Dr. Hardy W. Chan, VP and Director of Biotechnology Dr. Randolph M. Johnson Syntex Discovery Research Palo Alto, CA 94303	Dr. William Wilcox, Center Director Mark Pasch, Dir., Technology Dev. Prof. Liya Regel Consortium for Commercial Crystal Growth Clarkson University Potsdam, NY 13699-5700
Chuck Rudiger Lockheed Missiles & Space Company, Inc. Sunnyvale, CA 94088	John Vellinger, Vice President Space Hardware Optimization Technology (SHOT) Floyd Knobs, IN 47119
Dr. Javier de Luis, President Dr. Anthony Arrott Payload Systems, Inc. Cambridge, MA 02142	Al Reeser, President and CEO David Rossi, V.P. - Bus. Development Spacehab Incorporated Arlington, VA 22202
Dr. Wesley Hymer, Director Center for Cell Research Penn State University University Park, PA 16802-6005	Dr. Charles Bugg, Director University of Alabama - Birmingham Birmingham, AL 35294-0005
Dr. Steve Schwartzkopf Manager: Life Sciences & Biotechnology Lockheed Missiles & Space Company, Inc. Sunnyvale, CA 94088	Dr. Ray Bula Wisconsin Center for Space Automation and Robotics (WCSAR) University of Wisconsin Madison, WI 53706
Dr. Alex Ignatiev, Director Space Vacuum Epitaxy Center Houston, TX 77204-5507	Ole Smistad, COMET Program Mgr. Space Industries League City, TX 77573
Dr. Charles Lundquist, Director University of Alabama - Huntsville Huntsville, AL 35899	John Lloyd, ACRV Program Mgr. Sam Housten, ACRV CSE Lockheed Missiles & Space Company, Inc. Sunnyvale, CA 94088

3.2.6 Conclusions and Recommendations

The potential advantages of processing materials and products in a microgravity environment are apparently not well publicized by the relatively few companies and university centers currently involved in experimental activities.

Practical demonstration of useful, real, space-produced products has not yet occurred on a scale of significant magnitude to attract commercial interest.

The current NASA virtual monopoly of providing shuttle-hosted zero cost access to an orbital microgravity environment, through the CCDSs, is commendable in principle for the support of limited experimental-based opportunities.

This shuttle-based approach, however, with government ownership and operation of the access-to-space transportation and microgravity processing system, is fundamentally incompatible with private sector commercial business practices. The system is apparently excessively burdened with time-consuming bureaucratic procedures, provides less than desired on-orbit time duration and process-related electrical power, provides inconveniently long leadtimes between repeat flights and between planned intent and realization of a given flight, is subject to schedule delays and manifest priority changes, and provides a training burden and local microgravity disturbance potential due to the constant presence of crew.

The private sector development of the Spacehab equipment has been a commendable and promising first step towards commercialization of the provision of microgravity processing facilities., however,, the commercially acceptable price threshold for general use of this facility appears to be more than commercial industries are willing to pay. It seems reasonable to suppose, however, that the apparent reluctance of commercial customers to use the facility is also dependent on the current access system characteristics as described above, since Spacehab is flown as a shuttle annex.

The free-flyer COMET program concept for microgravity processing access appears to be a step in the right direction to address at least some of the concerns associated with the current STS-based system., however,, this new system still appears to continue the principle of government ownership and operation and appears to be designed and managed as a research asset rather than a commercial venture. In addition, this system also appears to offer a very high price for access at about a factor of 3 above Spacehab with therefore pessimistic prospects for stimulating commercial use.