An Inconvenient Truth About Ares vs. Commercial Launch Costs

Ares I--We Have Lift-off!

The old saying goes, there are numbers, damned numbers, and statistics. During today’s hearing before the House Science & Technology Committee hearing, that maxim played-out when, under questioning from Rep. Suzanne Kosmas, NASA’s Associate Administrator for Exploration Systems Mission Directorate (ESMD) Doug Cooke affirmed that the marginal cost of an Ares I/Orion launch is $176 million at two launches a year. That number really jumped out at everyone…actually it was a jaw dropper, because for the last 6 months NASA and Constellation critics have been bandying a much higher cost estimate for launching Ares I/Orion and claiming that Ares I cost too much. Today, we found out that was not true.

First, the exchange between Rep. Kosmas and AA Cooke,

REP. KOSMAS (approx. 48:30 in the hearing)
There seems to be, and this follows up on the questions asked of you by Mr. Olsen, there seems to be a good bit of confusion on what would cost to launch an Ares I once it is developed, in other words the marginal cost. This is something I just wanted to get on the record, so a “yes” or “no” from you Mr. Cooke is all that’s required. NASA stated last year that when Ares I is operational in FY 2016, its marginal cost based on a rate of two flights per year would be $176 million per flight. Now that you have completed the Constellation program PDR, has that number changed significantly or is it still a reasonable estimate.

In terms of marginal costs, it’s still a reasonable estimate.

This contrast sharply with NASA Administrator Bolden’s testimony during yesterday’s hearing of the House Appropriations Science Subcommittee. When Rep. Aderholt questioned the Administrator’s estimates for how much it would cost to launch Ares I at 3 launches per year, the NASA Administrator said that it was $1.3 – $1.6 billion per flight when Rep. Aderholt had in his hand a letter from NASA claiming the cost was $1.1 billion a year for all three flights. Here’s the transcript,

REP. ADERHOLT (approx. 1:58:53 in the hearing)There is a strong reason to question the dollar figures that was produced by the Augustine Commission. Can you provide the Committee the Ares I and Ares V cost estimate NASA had last Spring, they had estimated last Spring, and also provide the Committee with a written detailed explanation from NASA as to how operating Ares I would cost $4 billion per year.

Sir, I can provide that for the record. I would be glad to do that.

And the reason I mention that is because my staff was given the numbers of Ares I, the operation cost of $1.3 billion…

That’s per flight.

OK, so you’re saying…

I do know that the $1.3, $1.6 billion, and when I talk about things that shocked me, because I wanted to use an Ares type vehicle as a test vehicle and when I asked the question how much would it cost me to fly, not an Ares I, but that kind of vehicle, then the number given to me at the time was $1.6 billion per flight. And it seems like an extreme number to me and I’m still looking…so I’ll be glad to provide you with information, the basis for that

The reason that I say that is because this is the response from NASA and it says that the total cost for three flights in year is $1.1 billion.
(ADERHOLT is holding up a letter from NASA and pointing to the quote of $1.1 billion for three flights a year).

I will go back and double check my numbers and get back to you on that.

The numbers provided to the Augustine Committee and to Rep. Aderholt concerning how much it would cost to operate Ares I for three launches represents a significant difference. Now we’re back to damned numbers.

The real challenge is to try to figure out how much the cost of infrastructure, the fixed costs, is for supporting Ares I. If AA Doug Cooke is correct that the actual Ares I/Orion launch cost is $176 million per flight for two flights, and if the margin cost for three flights can be extrapolated as $528 million, then the cost associated with infrastructure would be the total cost for supporting Ares I flights minus the total marginal cost, or $1.1 billion – $ 0.528 billion, leaving $572 million as the amount for infrastructure to support 3 Ares I flights per year. This would represent a significant reduction of fixed-costs compared with Shuttle missions, which according to the Augustine Committee is currently around $1.5 billion [Review of U.S. Human Space Flight Committee Final Report, p. 50, §4.1.2, Fixed Costs], and which represents “…nearly 90% of the cost of running: the Kennedy Space Center; the engine test facilities at Stennis Space Center in Mississippi; a Mission Control Center in Houston; and the Michoud Assembly Facility in Louisiana.”

The questions Cooke wouldn’t answer dealt with how infrastructure cost, say launch pads, launch control, and mission control would be costed out for commercial launchers. After all, regardless of whether NASA puts astronauts into orbit on Ares I or a Delta IV Heavy, there will be the cost associated with supporting that crewed launch at Kennedy Space Center and managing the mission from Mission Control in Houston.

During last week’s testimony before the Senate Science Committee, Orbital Science’s Sr. VP and former astronaut Frank Culberson, as well as former NASA Comptroller Malcolm Peterson estimated that crewed commercial launches would be around $400 million. How much of that launch cost is marginal and how much is associated with the support infrastructure of that launch was not disclosed. From the cost estimates provided by NASA to Rep. Aderholt’s staff of $1.1 billion for flying 3 Ares I flights per year, that would mean that each Ares I flight would total $366 million. That leaves Ares I flights costing $36 million less than a commercial crewed launch.

In other words, it now appears that the so-called cost savings of using commercial launchers vs. Ares I to put astronaut in low-earth orbit are marginal at best and non-existent at worse. If true, this undermines one of the key tenets of the case made by NASA senior leadership as they try to sell the political and policy debacle that has been the President’s proposed FY 2011 NASA Budget. It also reveals a lack of depth of analysis that would indicate that this policy proposal to get NASA out of human space flight did not originate within NASA but elsewhere.

2 comments to An Inconvenient Truth About Ares vs. Commercial Launch Costs

  • Jason Kloes

    Well put Jim. There definitely is non-clarity in the cost figures. A team would have to compare the costs between NASA and private contractors. However, those figures don’t exist on the private sector side. One could speculate on vehicle costs relatively easier that the support costs. We all know that support costs needed by private companies would be redirected right back to the government with mark-ups of course. So, with all things considered equal, just the overhead alone (15-25%) would likely put it over the NASA costs.

  • Another way to look at these number is to suggest that commercial, if it is ever going to succeed against foreign competition (Russia, France, China…) needs to stay away from Kennedy and instead plant it’s feet somewhere that has much lower operating costs.