SpaceX, the rocket company founded by tech mogul Elon Musk, is poised to make good on its promise to slash the cost of launching things into space. In December 2015, SpaceX did something no commercial aerospace company had done before: It launched a satellite into orbit aboard a Falcon 9 rocket, then safely landed the rocket’s lower half, called the first-stage booster, on a launchpad.

Musk was ecstatic and for good reason. Orbital rockets cost tens of millions or even hundreds of millions of dollars to build, but they’re never recycled; they typically smash into the ocean and sink to the bottom. While SpaceX has filled a large hangar with used rocket boosters over the past year, it has yet to show the boosters can be re-launched. But the feat now seems imminent.

SpaceX could pull off its first-ever launch of a used booster as early as March 29. The rocket part will help ferry a new communications satellite into orbit — then go for a second touchdown. “We Will attempt a drone ship landing [of the booster], too,” John Taylor, SpaceX’s director of communication said.

A satellite company called SES signed a contract for this launch in August 2016. However, SpaceX delayed that mission due to a launchpad explosion on September 1, 2016. No one was hurt during the incident, which Musk said was “the most difficult and complex failure we have ever had”. It took the company months to figure out what happened and allegedly fix the issue.

If the upcoming mission, called SES-10, goes as planned, it could mark the beginning of an era where SpaceX can reliably offer the lowest cost per pound to get stuff to and from low-Earth orbit and beyond. How deep will the discount be? Now that SpaceX appears on the verge of being the first to reuse rocket hardware since NASA with the U.S. space shuttle, investors and competitors are sharpening their pencils to assess the business case.

The prima facie appeal of reusing rockets has always obscured the challenges of refurbishing, at low cost, a rocket stage and engine bloc that has suffered the stresses of hurtling through the atmosphere in advance of landing. “It’s quite fundamental,” SpaceX founder Elon Musk said April 8, 2016, after the Falcon 9 first stage made a clean touchdown on a drone ship located offshore of the Cape Canaveral Air Force Station, Florida, as part of a successful mission to deliver supplies to the international space station for NASA. The stage has since been returned to port and will be repeatedly test-fired to determine its fitness for reuse as early as this year. “It’s just as fundamental in rocketry as it is in other forms of transport – such as cars or planes or bicycles,” Musk said in a post-launch briefing.

NASA engineering veterans of the space shuttle would surely agree about its being fundamental. But after beating their heads against the problem for years, they also would say it’s much more difficult than hopping back into your car. “The SSMEs were reusable,” Dan Dumbacher, former NASA deputy associated administrator for exploration systems development, said of the space shuttle main engines. “We tried to make them reusable for 55 flights. Look how long and how much money it took for us to do that, and we still weren’t completely successful for all the parts. I want to be realistic: We are not as smart as we think we are and we don’t understand the environment as well as we think we do.”

Dumbacher was speaking in April 2014, before Hawthorne, California-based SpaceX succeeded in landing the Falcon 9 first stage, first in December on a pad near the launch site, and then during the April 8 mission. But his caution related not to the fact of landing safely, but to the economics of refurbishment.

SpaceX is a privately held company that does not publish its financial statements, making a detailed cost analysis difficult. Outsiders are left with piecing together what they can, based on SpaceX’s public statements. In March, SpaceX President Gwynne Shotwell said the company could expect a 30 percent cost savings from reusing the first stage. If this translated into a 30 percent price reduction to customers, that would drop Falcon 9’s advertised price to $42.8 million from today’s $61.2 million.

When measured by contract volume, SpaceX’s biggest customer is SES of Luxembourg. SES has said repeatedly that it is willing to be the inaugural customer for a reused first stage but would like the price to move closer to $30 million, at least for the first flight.

Johnson Alabi
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