Excellent comments and I will try to address them one
by one.

--- Lynn Olson wrote:
> >As for launch costs, they only go down so long as
> the
> yearly volume increases, not the volume over 16+
> years<
>
> This may be true, but it would make rockets
> different from all other
> products that have been studied.
> I think this is unlikely. Any product could make a
> claim to uniqueness,
> and yet a variety of very different products show
> very similar experience
> curves with respect to cost. [cars, golf balls,
> limestone, phone calls,
> paper bags, steel ingots, pins, cookies, airplanes,
> TVs, broiler chickens]

The big difference here between rockets and the other
product again goes down to mass production. All of
those you mentioned are mass producable, commercial
rockets at this point have not been. No rockets, save
those use for ICBMs, have been mass produced in the US
or Europe. I make this distinction because if I
remember correctly, the Russians have mass produced
the proton but I do not have the sources to back up
that statement.

> If, and note I do say if, the experience curve
> argument does apply to
> rockets, what would be the consequences?
>
> 1. re: Al Globus' proposal.
> The proposal may be a way around the experience
> curve, by paying for
> development costs before the market justifies it.
> However, in the
> historical examples technological advance is only
> one facet of cost
> reduction, and I do think volume will be required to
> really push costs
> down. I would also hesitate to favor RLVs over
> expendables - see below.
>

I agree with you on this point and have argued in the
SSI list of the advantages of ELV over RLV for any
non-human flight and will not start that one up again
right now.

> 2. Expendable costs can still come down a lot. The
> experience curve says
> the lack of cost reduction over the past couple of
> decades is to be
> expected. Those people who point to the cost of
> materials, propellants,
> and operations and say that costs could be a lot
> lower are probably right.
> However, we need experience to get there. As an
> example, Intel could
> probably have predicted the performance of the
> Pentium IV in 1990, but that
> did not mean they could produce it in 1992.
> Experience is important.
>

The excellent article Mike Combs mentioned covers this
point (thanks Mike, I've bookmarked that article for
future reference!)

> 3. As someone (Jack?) said earlier on this forum,
> for near term market
> ideas we need to accept current launch costs. We
> would like ideas for
> which the market would increase rapidly as costs are
> lowered, which would
> produce the "virtuous cycle" typified by Moore's
> law. More volume = lower
> cost = more volume = lower cost, etc., etc.
>
> 4. To produce cost reductions of 20-30 per cent per
> year, we need 4000
> launches the first year, 8000 the second, and so on.
> This is the key, and somewhat discouraging point.
> Maybe the market can be
> segmented, allowing a start over at lower numbers.
>
> 5. Launches of any sort should be encouraged.

more volume is definately the key as only with more
volume can we reach a stage of mass production.
Unfortunately I do not see the volume picking up
again.

Wall Street was burned pretty bad on its investments
in large space projects. Alot of money was lost on
the low earth constellations and on creating creating
rockets (re: Beal). It is going to take a long time
to regain their trust. Just like when you go
bankrupt, it takes 5-7 years to regain a credit
rating, the same I think holds for space investment.

Compounded on this is a decline in the
telecommunications segment. Just pull up a graph of
lucent, nortel, loral and other backbone telecom
companies and you will see a battered sector. This is
important as telecom is the largest investor in space
related products, whether it be in a satellite in
orbit or the ground infrastructure to utilize space
resources.

It will be 2006 at the earliest till we can depend on
wall street getting excited enough to start investing
in space again. Until this happens, we in the
industry will have to ride it out.

To tie this analysis back to launch, without the
increase in demand for space services, the demand for
space transportation will not grow. Without growth,
costs will not be lowered. Currently no rocket
manufacturer can exist on its own two feet. Boeing,
Lockheed, Arianne, H2-A, Orbital, Great Wall Company
all depend on their respective governments to keep
them afloat.

--- "Arthur P. Smith" wrote:
> What is really needed are new markets, beyond the
> currently stagnant
> government and communications satellite industries.
> Is there a
> sub-orbital market that could be served with large
> numbers of
> launches? Fast package delivery? Tourism?
> Surveying/mapping? In a sense
> we really need
> to start over - which is I think where XCOR and
> related companies are
> trying to get.

I think this is the most key factor, who is the
demand. Traditionally, the biggest user of
transportation systems is frieght. So I would tend to
go with your idea for fast package delivery for the
short term.

Surveying is a decent market but so far remote sensing
really hasn't lived up to its promises yet as the
bankruptcy of orbimage demonstrates.

Tourism I believe will only be a small percentage and
there is still a long way to go till we can have
affordable tourism beyond suborbital. Nothing short
of colonization would help push this particular market
sector forward to a realistic multi-billion dollar
industry. Just look at how few tourists go below 1000
ft in the ocean. There are commercial companies that
will take you down there as a tourist, but the market
just is not there to support such a niche tourist
industry. I personally believe this is analogous to
the same crowd that will venture into space.

Overall, until we see either colonization or heavy
industry going into space (mining, manufacturing), I
do not think there will be a driver to lower costs.
Unfortunately, both of those sectors are also waiting
for the launch costs to go down so right now its kind
of a chicken and egg scenario.

-Ryan Z

On Wednesday, December 4, 2002, at 12:00 PM, Ryan Zelnio wrote:

> I think this is the most key factor, who is the
> demand.

Demand is a function of price. If a car cost $2,000,000, how many of
us would have one? If a flight to orbit cost $1,000, how many of us
would go?

Price is a function, among other things, of what we know. We know how
to make cars for a few thousand dollars (the rest is markup). We don't
know how to launch a person for that price. What we know can be
modified by research. The government is actually pretty good at that.

The International Space Station (ISS) most important legacy may be
jump-starting space tourism. Consider: the first space tourist, Dennis
Tito, was supposed to go to the Soviet era Mir space station. Under
pressure from NASA, Russia de-orbited the Mir which resulted in Mr.
Tito going to the ISS instead. Now the Mir was old, smelly, crowded and
probably not all that nice. The ISS was brand new, shinny, much more
roomy, etc. Mr. Tito came back to Earth with glowing accounts of how
great space is. Would his experience have been as good on Mir?

Al Globus
CSC at NASA Ames Research Center
http://www.nas.nasa.gov/~globus/home.html

The materials in one asteroid (the largest ) are sufficient to make
orbital space colonies with ~500 times the surface area of the Earth in
usable real estate. See http://lifesci3.arc.nasa.gov/SpaceSettlement/
for details.

Al Globus
CSC at NASA Ames Research Center
http://www.nas.nasa.gov/~globus/home.html

Mike:

Great link.

An interesting comment in the link is

"Assume we expense the development cost or amortise it over a sufficiently
large number of vehicles that it can be ignored"

That indeed is the crux of the matter.

Let's assume it costs $6 billion to develop an RLV that can launch 20,000
lbs to LEO. I chose $6 billion because that's what it took Boeing to
develop the 777 passenger airliner. Suppose that this RLV has
absolutely perfect operational performance: suppose that only one copy
of the RLV is built, and that the operations and maintenance cost per
flight is zero dollars --- this RLV never wears out, never needs
maintenance, the fuels are free, and it loads and launches itself without
any ground support crew.

But suppose that demand is not so hot and that it is only expected to
capture 10 flights per year for 10 years. After 10 years it will be
obsolete.

Well, at a 0% interest rate that still equates to $6 billion / ( 100
flights * 20000 lbs ) = $3000 / lb, or $60 million / flight.
At an 8% interest rate, that equates (see Excel's PMT function) to $4318 /
lb or $86 million / flight.
At a 15% interest rate, that equates to $5609 / lb, or $112 million per
flight.

[ FYI, to convert a yearly interest rate of 8% to a per-flight interest
rate, take ( 1 + 0.08 )^(1/10) - 1 = 0.007725795 = 0.7725795%.
Then we have that
PMT(0.007725795, 100, $6000000000) = $86,352,849
. ]

On the other hand, if there are daily flights (i.e.,365 flights per year).
then the numbers are
$82/lb at 0% interest
$118/lb at 8% interest
$153/lb at 15% interest.

So volume is indeed the key.

Ron
*******

"Combs, Mike"
12/04/02 10:21 AM
Please respond to spacesettlers

To: "'spacesettlers@yahoogroups.com'"
cc:
Subject: RE: [spacesettlers] launch

Here's the paper for you: A Rocket a Day Keeps the High Costs Away
http://www.fourmilab.ch/documents/rocketaday.html

Personally, I'd be turning handsprings over a company that was launching a
rocket a week.

Regards,

Mike Combs
(903)-868-6314

Message text written by INTERNET:spacesettlers@yahoogroups.com
>Here's the paper for you: A Rocket a Day Keeps the High Costs Away
http://www.fourmilab.ch/documents/rocketaday.html

Personally, I'd be turning handsprings over a company that was launching a
rocket a week.
<

Thanks.

You're right. We need to get to one a week before we can get to one a day.

Lynn Olson

On Wednesday, December 4, 2002, at 12:00 PM, Ryan Zelnio wrote:

> Just look at how few tourists go below 1000
> ft in the ocean. There are commercial companies that
> will take you down there as a tourist, but the market
> just is not there to support such a niche tourist
> industry. I personally believe this is analogous to
> the same crowd that will venture into space.

You may have a point, but I think space will be a lot more interesting
and fun than deep ocean. In particular, the view and zero-g play
should be much better.

The materials in one asteroid (the largest ) are sufficient to make
orbital space colonies with ~500 times the surface area of the Earth in
usable real estate. See http://lifesci3.arc.nasa.gov/SpaceSettlement/
for details.

Al Globus
CSC at NASA Ames Research Center
http://www.nas.nasa.gov/~globus/home.html