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Axiom space station
Axiom Space plans to start with commercial modules attached to the International Space Station, but eventually undocking and adding elements to create a standalone commercial station. (credit: Axiom Space)

NASA revises its low Earth orbit commercialization plans

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In June of 2019, NASA rolled out its new low Earth orbit commercialization initiative, an effort to build up both the supply of commercial capabilities in LEO as well as demand for them outside of NASA (see “NASA tries to commercialize the ISS, again”, The Space Review, June 10, 2019.) That initiative features several elements, from setting aside a fraction of International Space Station resources for commercial activities and allowing private astronaut missions to starting the process of supporting both commercial ISS modules and standalone commercial stations that could, eventually, succeed the ISS.

“I guess I’m having trouble understanding how Estée Lauder’s effort is going to support the commercialization efforts of NASA,” Sen. Shaheen said last year.

NASA’s progress on that initiative has been uneven. It has had some successes, notably with its competition to offer a port on the station for a commercial module. The agency selected Axiom Space in January 2020 to use that port, and the company has since been working both on that module as well as fundraising. In February, the company raised $130 million to support continued development of that module, which will form the core of a commercial segment of the station and, eventually, a standalone station.

Axiom also secured the first private astronaut mission under that NASA program, called Ax-1 and scheduled to launch to the station early next year (see “The new era of private human orbital spaceflight”, The Space Review, March 8, 2021.) It will fly three customers to the ISS on a SpaceX Crew Dragon spacecraft commanded by a former NASA astronaut, Michael López-Alegría. In an interview around the time the company raised its new round, CEO Michael Suffredini said it had more such missions “in the hopper” for the next couple of years, pending NASA approval.

Other elements of that initiative, though, have had a rockier start. The new commercial use policy for the station allowed those resources set aside for commercial applications to include marketing opportunities. Some in Congress, though, raised eyebrows when one of those first commercial users was the cosmetics company Estée Lauder, who arranged to fly 10 bottles of its Advanced Night Repair cream to the station for a photo shoot.

“I’m a fan of Estée Lauder’s Advanced Night Repair, like anybody else who might want to benefit from its antigravity properties,” said Sen. Jeanne Shaheen (D-NH) during a hearing by a Senate appropriations subcommittee last September. “I guess I’m having trouble understanding how Estée Lauder’s effort is going to support the commercialization efforts of NASA.”

While that criticism didn’t affect that particular project (although the company hasn’t yet released any images of the cosmetics in space as part of a planned social media campaign), it did have longer-term effects on ISS commercialization. In late February, NASA quietly, and significantly, increased prices for commercial uses excluding research and education, like marketing.

The original price list, released as part of the LEO commercialization campaign, included a significant subsidy intended to stimulate demand. The revised price list was intended “to reflect full reimbursement for the value of NASA resources,” the agency said in a brief statement. Sending cargo to the station, also known as “upmass,” went from $3,000 per kilogram to $20,000. An hour of crew time on the station went from $17,500 to $130,000.

“NASA has not done a good job communicating with the stakeholders,” said Manber.

NASA’s hand, the agency later acknowledged, was forced by a provision in the report accompanying the fiscal year 2021 spending bill that prohibited NASA from using funding “to subsidize the cost of any project that is primarily intended for marketing, advertising, or entertainment purposes,” like, say, Estée Lauder cosmetics. That provision, it said in a statement, “is clear that no appropriated funds could be used to subsidize certain commercial use activities.”

The change took many commercial users of the station by surprise. “NASA has not done a good job communicating with the stakeholders,” said Jeffrey Manber, CEO of Nanoracks. “We are in discussions with customers and suddenly we are being notified of a major increase.” He later said he supported having marketing and related users pay full costs, but that he was disappointed NASA did not consult with users or its own advisory committees about the change.

Congressional skepticism about LEO commercialization affected NASA’s efforts in another way. NASA requested $150 million for those activities in its fiscal year 2020 budget proposal, but received only a tenth of that amount. For fiscal year 2021, it again sought $150 million for LEO commercialization, but did only slightly better than 2020: $17 million.

That lack of funding slowed down work on another element of the strategy, support for a standalone or “free flyer” commercial station. NASA originally intended to solicit proposals for funding support for those projects through the Next Space Technologies for Exploration Partnerships (NextSTEP) program, in much the same way it did for the ISS port awarded to Axiom Space. But while the NextSTEP competition for the port went forward, the one for the free flyer stalled. Last summer, agency officials said they were not planning to proceed with a free flyer competition through NextSTEP, citing uncertain funding.

NASA has reset its efforts to support work on commercial space stations through a new initiative, the Commercial LEO Destinations (CLD) program. “The primary purpose of the Commercial LEO Destinations project is to stimulate US private industry development of free flyer orbital destinations and capabilities, and create a market environment in which commercial LEO destination services are available to government and private sector customers,” Angela Hart, commercial LEO program manager at NASA, said at a March 23 industry day briefing about the new effort.

“After ISS end-of-life, I think our requirements will naturally be somewhat smaller than they are today,” said McAlister.

CLD will take a two-phase approach to supporting those free flyer stations. In the first, NASA will award up to four Space Act Agreements to companies to support initial designs of commercial stations. Those awards, expected by late this year, would have a total value of $300–400 million and cover work in fiscal years 2022 to 2025. The goal, NASA said, is to mature private space station concepts to the preliminary design review level.

The use of Space Act Agreements, with the expectation that companies contribute their own funding to the awards, reflects uncertainty about budgets. “Part of the reason for going with a funded Space Act Agreement is that it does provide us with some flexibility,” Hart said, such as being able to extend schedules at no cost.

A second phase will follow in 2026 to cover NASA certification of those commercial space stations and purchase of services, including both payload and crew accommodations. Exactly how that will be carried out is still being refined, officials said at the industry day briefing.

NASA did disclose its projected demand for commercial space stations: two person-years of crew time and 200 investigations a year. That’s much less than the ISS today, where NASA has four to five astronauts at any time, performing many more investigations.

That decreased demand reflects expectations that NASA will complete a lot of its exploration-related research on the ISS before the station’s end of life, some time in the next decade or so. “After ISS end-of-life, I think our requirements will naturally be somewhat smaller than they are today,” said Phil McAlister, director of commercial spaceflight development at NASA headquarters.

Exactly when those stations would need to be ready remains to be determined. NASA’s formal authorization for ISS operations extends to only 2024, but there have been several efforts in Congress to extend that to 2028 or 2030. Among those who tried to extend that authorization is former senator Bill Nelson, nominated by the White House last month to be the next administrator of NASA.

Despite the struggles of elements of the LEO commercialization program, NASA officials like McAlister remained upbeat about its long-term prospects. “If it were always to remain this way, our aspirations in low Earth orbit would always be limited by the size of NASA’s budget,” he said of the government-led approach in use today. “By bringing the private sector into these areas as suppliers and users, you expand the pie. You have more people in low Earth orbit, using low Earth orbit to do interesting and potentially profitable things.”

SNC space station
Sierra Nevada Corporation’s proposal for a commercial space station makes use of its Dream Chaser vehicle and inflatable module technology it is developing. (credit: SNC)

The business case for commercial space stations is still a matter of speculation. Some companies thinking about participating in the CLD program are looking to NASA to increase its investment in, and speed up its timetable for supporting, commercial stations.

“We’re a little disappointed in the amount of money NASA wants to put against it and the timeline,” John Roth, vice president of business development at Sierra Nevada Corporation’s space systems business unit. He spoke at a March 31 event for selected members of the media about his company’s plans for a commercial space station.

The company announced at that event that it was developing a space station, called simply SNC Space Station, that would be use inflatable modules the company is developing and be serviced by cargo and crew versions of its Dream Chaser vehicle. While SNC discussed in passing its interest in commercial space stations at past events, this event was focused on its plans for that station and working with NASA.

Roth said SNC would participate in the CLD program, and expected to get one of the initial Space Act Agreements to fund initial development. However, he argued NASA needed to invest more money and move more quickly to avoid a gap when the station reaches the end of its life. “We think there should be much more of a sense of urgency to get a space station up before the ISS is retired,” he said, warning that the “reality of space” could cause the ISS to end long before projected schedules for its planned retirement.

“We have done financial modeling and it’s not going to be inexpensive,” Roth said of SNC’s proposed space station. “We’re prepared to invest beside NASA in a public-private partnership to make that happen.”

He said that a schedule that calls for reaching the PDR phase of development by 2025 is “too late” and that SNC could move quickly. “We think it should be a public-private partnership,” he later noted, because of the expectation NASA will be an anchor tenant and levy requirements on the station before allowing its astronauts on board.

The company offered few details on the cost of its proposed station and how much it would invest on its own for a station. “We have done financial modeling and it’s not going to be inexpensive,” Roth said, noting only that it would cost a “small fraction” of the ISS. “We’re prepared to invest beside NASA in a public-private partnership to make that happen.”

It will have company. Axiom Space will likely be interested in the CLD program, along with Nanoracks, another company with commercial space station ambitions. Redwire, a company formed last year through the combination of several smaller companies, such as space manufacturing company Made In Space, has also shown an interest in the program.

Redwire announced March 25 it would merge with a special-purpose acquisition corporation (SPAC) to go public, raising $170 million to allow it to make “strategic investments” and acquisitions. In an investor presentation, it highlighted LEO commercialization as a strategic focus area, noting its technologies are “foundational for the second golden age of space,” which included commercial space stations.

But even as money flows into the space industry, the costs of both developing and operating a commercial station will likely require additional investment, either from the private sector or from NASA. McAlister noted at the industry day that the funding it will offer in phase 2 of CLD has yet to be determined, and will depend in part on what prices industry says it needs to charge to close its business case. “I can tell you that we plan on spending many hundreds of millions of dollars annually on the services in phase 2,” he said.

“For those of you who want to know what NASA’s plan is, this is it,” he said of CLD. “We really feel like this is a robust and comprehensive plan.”

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