Marginal Launch Costs For Reusable Vehicles

I’m writing a paper that contains the following sentence: “Current reusable suborbital providers, such as XCOR Aerospace, Virgin Galactic, or Armadillo Aerospace, are likely to expand their performance envelopes into orbit over the next 10 to 15 years, driving prices down much closer to the marginal cost of propellant, which means potential prices of less than $100 per pound of payload to LEO.”

Can anyone find me a citation to substantiate this statement? I don’t really want to show my work in this document.

[Late evening update]

Ummmmm…folks in comments?

This is all fun, but I don’t need the argument — I know the argument. I need a citation of someone at least semi-credible who has made it, somewhere else.

43 thoughts on “Marginal Launch Costs For Reusable Vehicles”

  1. I don’t really want to show my work in this document.

    If not in the paper you’re working on right now, please show it here sometime. I’d be very interested in seeing it.

    1. I’ve seen the assertion, not so much the argument, many times by many people, of course. Indeed, the claim is usually that an RLV has been within the state of the art for many decades now, most notably by the late Len Cormeier.

      That being the case, why not just cite Spencer or Cormeier?

  2. Gary Hudson was on the space show sometime before Thanksgiving. He said that it would be $50/lb. If it worked out like an airline to be around four or five times the propellant (fuel) costs.

    1. I’d have to run the calculation again, but I got about $15 per pound for LOX/kerosene (with considerable error) and about three times that much for LOX/Liquid hydrogen. About ten or so years ago, the fuel part of airlines costs were something like a third though I imagine it gets significantly lower when fuel costs go down.

      In any case, I wouldn’t consider costs of $100 per pound until there’s flight volume orders of magnitude above present. I’d go as far as to say that commercial space flight might not break $1000 per pound. That would be the target I’d aim at in saying whether commercial space flight has been successful over the next ten years or not.

      1. When I say “I got about $15 per pound for LOX/kerosene”, I mean the cost of propellant per pound of payload for a fairly efficient rocket using those propellants and launching into LEO.

          1. I’d have to look it up since my old calculations are lost. I recall that LOX was extremely cheap like cents per pound, RP-1 (“kerosene”) significantly pricier on the order of the cost of gasoline and diesel, and liquid hydrogen had a signficantly higher cost than RP-1 did.

      2. In any case, I wouldn’t consider costs of $100 per pound until there’s flight volume orders of magnitude above present. I’d go as far as to say that commercial space flight might not break $1000 per pound.

        That’s called a self-fulfilling prophesy. Why would you design your vehicle so large that its flight rate is going to orders of magnitude less than what’s required for optimal operations?

        Other than an ideological commitment like “we need to do an immediate sprint to the Moon/Mars/Alpha Centauri,” of course — which is a compelling argument against such a rush.

        1. Why would you design your vehicle so large that its flight rate is going to orders of magnitude less than what’s required for optimal operations?

          Because most of the profit is in developing the vehicle, not running it? Oh, wait, we’re talking commercial space flight. 😉

          As to “self-fulfilling prophecy”, I don’t have a measurable impact on commercial space flight, so any predictions I make will not by themselves influence the commercial space flight market. I doubt Rand would make much of a difference either, despite his better vantage point.

  3. One thing you CAN show is that solids will never get you cheap orbital flight. It takes no less than 25 pounds of solid propellant per pound to orbit, and the best anyone can do is $30 per pound of solid. So your floor with solids is $750 per pound of payload. Liquids are closer to $50.

  4. The cost of flying an airliner from point A to point B is considerably more than just the cost of fuel. Yes, fuel is a major expense for an airliner but you also have to factor in acquisition costs (purchase or lease), maintenance, crew, ground servicing, landing fees and taxes. A reusable spacecraft would be little different.

    1. A rule of thumb for cargo aircraft, fully utilized, is 1/3 fuel, 1/3 lease, 1/3 everything else (for a 747). The exact proportions may vary some with time, but not too much. It makes $150 a pound to LEO sound at least not like a fantasy…

      1. Those numbers are based on a high utilization rate. Airliners don’t make any money while sitting on the ground. A cargo 747 flies very regularly in order to make money.

        I own an old Piper Cherokee. My fixed costs (annual inspection, clamshell hangar, insurance, biannual medical exam, biannual transponder/altimeter check) average about $2200 a year. That’s before I even start the engine. The numbers would be a lot worse if I had to make payments on it. Avgas sells for $5.49 a gallon at my local airport and I burn from 7-9 gallons per hour in cruising flight. If I fly 100 hours a year, the total cost per hour works out to about $60. However, my budget doesn’t currently allow me to fly nearly that often, so my actual cost per hour is more like $125 an hour and that isn’t even factoring in a maintenance allowance for engine overhaul (about $10,000 if I’m lucky). That makes for a pretty expensive hobby. The only thing cheap about flying is the air in the tires.

        R&D on a fully reusable spacecraft is likely to be pretty substancial and the number produced is going to be small. The acquisition costs are going to be high so the financing costs will be high. The amount of maintenance per mission will vary considerably depending on the design. There will be a variety of fixed costs that have to be amortized over the projected flight rate and those costs could be many times the propellant costs. If you have enough payloads to fly many times per month, the cost per flight will be much lower than if you can only fly a few times each year.

        1. A good business man would first look at how to go about getting his plant utilised to its full potential, so lets start with a reusable that can fly 100 times a year, divide those fixed costs by the cargo/passengers carried on that number of flights, now, how to get flight numbers to that level, what costs will the market bear?

          if each flight can carry 20 passengers and 3000kg he arranges the charging system with stand bys etc to fill every flight.

          If at the optimum flight rate he needs to sell each flight out at $7.5 million he might look to sell tickets at an average of $200,000 and cargo space at $500/kg. Is there a large enough market at that price? I think so, so how about $250k a ticket and $600/kg?

        2. R&D on a fully reusable spacecraft is likely to be pretty substancial and the number produced is going to be small. The acquisition costs are going to be high so the financing costs will be high.

          You could say the same thing about aircraft (the Spruce Goose) or computers (“IBM forecasts a total worldwide market for 10 large computers).

          If that’s true, then you designed a product that was too big for the market. You assume that everyone will make the same mistake NASA made with the Space Shuttle. Rand, I believe, assumes that (at least some) developers will not make that mistake.

          The amount of maintenance per mission will vary considerably depending on the design.

          Yes, some designs will have unacceptably high maintenance and will therefore fail in the market (or fail to find investors to fund them). What is your point?

          Rand is talking about what is possible, not what is inevitable.

          1. I’m basing my comments on real world aircraft experience, not the economics of wishful thinking. Is there a market for 200 spaceflights a year? It depends on the cargo and destination. Worldwide, there are less than 100 launches per year of all nations combined. If you’re talking about launching satellites, there simply isn’t the market for the foreseeable future for hundreds of them to be launched each year. If you’re talking about a vehicle to carry humans into orbit, then you’ll need a destination other than the ISS if you want more than a handful of launches a year.

            Lowering the cost of launch will stimulate the industry to a point. How many new comsats are needed each year to meet market demand? What about other types of satellites? How many of them are realistically likely to be launched each year? How many tourists would have the money and guts to go into space each year if the price were $1 million? How many if the price were $100K? Without a high flight rate, you aren’t going to achieve low cost to space even if your propellant cost per mission were in the thousands of dollars, not with honest accounting. And without the payloads, there’s no demand for a high flight rate.

          2. I’m basing my comments on real world aircraft experience, not the economics of wishful thinking.

            No, you aren’t. No one in the real world designs a fleet of aircraft to fly only 100 times a year. At least, not operational aircraft. There are experimental jobs that fit that model, but Rand isn’t talking about x-vehicles.

            Worldwide, there are less than 100 launches per year of all nations combined.

            “Worldwide, there is a market for maybe 10 computers.” Yes, yes, yes. That doesn’t mean there will never be a market for more than 10 computers. That’s “Tom Matula” thinking.

            The real world operates according to Say’s Law. “Supply creates its own demand.” If there’s a market for 100 of something at $100 million a copy, that doesn’t mean there will be a market for only 100 at $100 thousand a copy.

            Without a high flight rate, you aren’t going to achieve low cost to space even if your propellant cost per mission were in the thousands of dollars, not with honest accounting. And without the payloads, there’s no demand for a high flight rate.

            At last count, the population of the United States was over 300 million payloads. I don’t think there’s an danger of running out soon.

            I don’t understand the obsession with communication satellites. Would you estimate the demand for cargo planes based on the number of radio towers in the United States?

          3. “If you build it, they will come” is about as realistic as Disney’s “wishing will make it so.”

          4. “If you build it, they will come” is about as realistic as Disney’s “wishing will make it so.”

            Right. That fool Disney. Everyone told him there was no market for full-length animated features. All those bight colors would hurt eyes — no one could stand to watch them for 70 minutes. Disney wouldn’t listen and risked his entire studio to make “Snow White,” and look what happened.

            He made the same mistake a few years later. The amusement park industry was in a major recession. Parks were closing all over the country. Again, Disney ignored the experts and risked his entire fortune to build the most expensive park ever.

            “Build it and they will come” is unrealistic? No one has ever created a new market by introducing a new product or service, in all of recorded history?

            Fulton’s steamboat, Edison’s light bulb, the Model T Ford, the DC-3, the Apple II, the cell phone, Pixar — all failures?

          5. Ed,

            You really believe in that inventor’s hype don’t you? All those examples satisfied existing needs. Ford wasn’t the only car maker, he just found a way to make cars cheaper. The DC-3 came about because of the backlog of demand for Boeing’s 247. RKO and UA had a bidding war to distribute Snow White. Disneyland was an extension of and merging of the existing model of local amusement parks with the business model for tourist attractions.

          6. You guys have overlooked all the tickets paid for by the taxpayers, what politician, bureaucrat or diplomat could turn down going to an all expenses paid conference at the orbital Hilton? I expect the UN people will be leading the flood of passengers to space, with law conference attendees close behind.

        3. Larry,

          If your analogy to your Cherokee usage is to hold, would you not also have to allow for making money with it?

          Your cost estimates assume 100% loss. Now I happen to rent Cherokees at – amazingly – $125 an hour (wet). If you sold each hour of your flight at $125 you’d roughly break even, no?

        4. “The numbers would be a lot worse if I had to make payments on it. Avgas sells for $5.49 a gallon at my local airport and I burn from 7-9 gallons per hour in cruising flight. If I fly 100 hours a year, the total cost per hour works out to about $60”

          How long does it take to get to space?
          Suppose you set it up so round trip was an hour?

          If have to rebuild the craft after every trip, one should
          use expendables.

          As for premise, I doubt it possible to get 100 per lb in 10-15 years.
          Nor do I think it’s very important if it happens.
          A real cost of $500 per lb to LEO- or less than 200,000 dollars per round trip
          seat would probably best one could hope for.
          Meaning all costs are paid for- spaceport, and development, sales, insurance, cost of money, profit, etc.
          But as I said before – the cost to orbit, isn’t something needed to overcome, to opening space frontier.
          Need market in space for space.
          Getting rocket fuel to orbit and being able to buy for $500 per lb, would as important as. Getting cheap fuel to orbit, could done with gun.
          Getting that to $100 per lb is easier- but even with $500 per lb it changes a lot things.
          Any rocket fuel sold in space for any “reasonable price” changes a lot.

          Suppose it cost 200 per lb to send crew to orbit, and you buy rocket fuel in orbit for $100. You could use rocket fuel to de-orbit, or go to the Moon, or whatever- that could be cheaper than crew to orbit at $100 per lb.
          Cheap fuel might mean you fly the hotel in lower orbit- so easier/cheaper to get to. Maybe better view.
          A large hotel or many hotels could lower costs. Bring passengers, immediate turnaround with different passengers for return.
          Going to LEO and being able to go to L-1 is better. For tourist- since halfway there, spend some time in LEO, go to L-1, and then spend some time back in LEO. The practical value getting crew to L-1, who go on to Moon. Going into space, might be about meeting other people in space- as far as tourism. And doing things in space.
          To do much into space, need rocket fuel.

  5. I’ve been trying to push discussion on the topic of cheaper access through reusable launch at nasa spaceflight forums it’s been pleasing to get comments from Gary Hudson, Jon Goff, Randy Campbell, Kirk Sorenson and others, with almost no one rubbishing my suggestions:
    http://forum.nasaspaceflight.com/index.php?topic=27712.0

    The flight cost savings, if the stratolaunch aircraft is made available to other providers, could make a dramatic difference in the marketability of orbital vs suborbital flight.

    Sorry I can’t actually help with your question Rand.

  6. I can’t find my copy at the moment, but take a look at Gordon Woodcock’s paper “Lower Bounds on Launch Costs” from 1988.

  7. The math is pretty simple. SpaceX has quoted the fuel costs for a Falcon 9 launch at $200k. Current launch prices for the Falcon 9 are $56 mil. for delivery of 10,450 kg to LEO. That includes a substantial portion of overall development costs as well as profit margin. If we hypothesize a reusable Falcon 9 variant with 9 tonne LEO capacity which costs $100 mil. to build (after some degree of amortization of development costs and assuming perhaps a modest profit margin), and we assume that such a vehicle can last 100 flights with modest maintenance and upkeep (a reasonable assumption considering the longevity of the STS Orbiter airframes, for example, despite being much more complex vehicles) and we add in a bit of padding for operational overhead (on the same scale as the cost of fuel, or a small multiple of that) then we end up with per flight prices in the range of $1.5 to $2 mil per flight, which translates to $100 or less per lb to LEO.

    These are all rather conservative estimates with fairly large amounts of padding, the biggest question mark is the longevity of the reusable vehicle. For example, it’s likely the incremental construction cost would be far less than $100 mil per vehicle. Additionally, using largely the same hardware in a Falcon Heavy configuration would increase the cost efficiency substantially (5x the payload, only <3x the equipment cost).

  8. Last time I worked it out the total raw propellant cost per kilogram to LEO was something like $10/kg for kerosene and LH2 and $5/kg for natural gas (liquid methane).

    The Falcon 9 is perhaps not a bad data point for hydrocarbon to payload ratio. LOX cost could be fairly negligible in quantity, ~0.9kWhrs per kilogram energy cost to make from memory.

  9. Don’t worry about disclosing the details of your work. Just tell your readers, “If you don’t believe me, just look it up on the internet!” There is no better way to lend substance to an argument than to say, “Look it up on the internet”. How do I know that for a fact? I looked it up on the internet.

  10. The logic I use is very similar to that above by Robin. I have a spreadsheet which allows various assumptions to be made. If the Falcon Heavy can be launched for $80 Million in bulk launches and carries 53 Metric tons to LEO, that is already $1.51 million per ton or about $686 per pound. That is using an EXPENDABLE Vehicle. To reach $100 a pound we only need an additional improvement of a factor of 7.

    Assume that (somehow) Musk can make Grasshopper work, and fly his stages back to the ground and land them intact. The landing should be easy like a DC-X, but the flying back with no wings is going to be tough and would involve some form of Supersonic Retro-propulsion. It should be specifically pointed out that Musk wants to find a way to recover and reuse all of his stages.

    The Falcon Heavy is composed of 3 Falcon 9-like stages. We can assume that the fuel for the entire vehicle would cost about 3 times $200,000 for those stages plus fuel for an upper stage. We can assume that the fuel cost is no more than 1 Million dollars.

    To cover the fuel mass to return to the launch pad and to make the stages strong enough to withstand entry forces, we could assume a re-usable Falcon Heavy payload of only 40 tons instead of 53. Assuming that each Falcon 9 stage costs about $25 million to construct, the whole vehicle should cost no more than $100 million to build.

    If as Robin assumes, the vehicle is flown 100 times, then the construction cost per flight is $1 Million, the fuel cost per flight is $1 Million, and we could assume that the pad and flight costs might be about $500,000. This adds up to about $2.5 Million per flight.

    With a payload of 40 metric tons, (88,000 pounds) the cost would be $28.41 per pound. If we assume that the payload is only 20 tons (44,000 pounds, the cost is still only $56.82 per pound. Both of these estimates are less than $100 per pound. If you assume the payload is only 10 tons, the cost is still only $114 per pound.

    The result is that even if a reusable Falcon Heavy can only provide 1/5 of its current rated payload as an expendable booster, it would still provide a means of launching payloads at about $100 a pound. You can see that a lot of mass and fuel can be added to the booster to cover various physical problems when you recover the booster intact and ready to use again. Reusability is the key to low launch costs and always has been. Rick Tumlinson’s throw-away airplane video pioneered the analogy which has helped us explain what should be obvious but somehow rarely is.

    John

  11. Rick Tumlinson’s throw-away airplane video pioneered the analogy which has helped us explain what should be obvious but somehow rarely is.

    Unless he made that video prior to mid-2004 (and perhaps not even then), he didn’t “pioneer” it.

  12. Hey Rand, I think G. Harry Stine mentions it in his book, Halfway to Anywhere. You might can get the book at Amazon.

  13. You can find most of this argument laid out extensively in Eugen Sanger’s book “Space Flight: Countdown for the Future” as well as Harry Stine’s book mentioned above.

  14. Here’s something promising:

    Jurist, J. M., “Commercial Suborbital Sounding Rocket Market: A Role for Reusable Launch Vehicles,” DOI:10.1080/14777620902782660

    Space advocates adopted the tenet that the way to reduce the cost of space access is to fly reusable vehicles so development and production costs could be amortized over many flights. Some have also suggested that commercial suborbital flights, both for scientific payloads and for human space flight participants, may provide a path in which a revenue stream can be ultimately used to fund orbital and deep space operations. Some aspiring space launch providers (NewSpace) have incorporated in order to develop and fly such vehicles. This paper examines the economic and business conditions for reusable suborbital sounding rockets. Given current market size and pricing, the global nonmilitary suborbital sounding rocket market is less than 60 flights of perhaps 200-kilogram payloads annually at roughly $1 million each. High demand elasticity (increased demand with lowered prices) at a price of significantly less than $250 per kilogram of payload might increase the market to possibly 1500 flights annually. The business case for developing and flying reusable sounding rockets for this market cannot be closed with investor capital unless flight rates are markedly higher than at present. This paper discusses potential approaches to closing the business case.

    From a related 2008 opinion piece by the author:

    . At least one RLV startup is offering future flights to 100 kilometers at $250 per kilogram (Ref. 2).

    Doesn’t exactly source authority to your assertion there, but there’s a start if nothing else.

  15. Apparently, Dr. Paul Czysz has done some research into this. I currently have just this reference to his work, but I’m looking for more. He cites fuel costs of $25 per pound of payload in 2004 dollars (I think that’s LOX/liquid H2, but I’m not certain) in the chart displayed in that link. I’ll investigate further.

  16. I was present at White Sands, representing the Journal for Space Development (published in Houston) when the DC-X made its epochal second flight, which represented the exact moment when a large rocket vehicle was reused for the very first time. This was about 9 am on Sept 11, 1993. Thus the second flight was much more important than the first. The importance was acknowledged by the authorities who invited a wide range of media and helicoptered in a lot of bigwigs for the event. Almost a whole generation has now passed since that moment.

    My video, which mostly focused on the audience reaction to the flight, was used in the distribution video tape that the Space Access Society sent around afterward. After the flight we were bused the 3 miles to the launch site and were allowed to take pictures within about 30 feet of the vehicle.

    As I remember, the throwaway airplane video was made by Rick Tumlinson about two years before the DC-X first flew, so I would guess it was created in 1991. I am not sure which space event I first saw it at. Both the DC-X program and the throw-away airplane argument and video have contributed to interest in and support for reusable rockets and spacecraft.

    There has probably been insufficient time since the announcement of the Grasshopper concept for any professional engineer to write a paper and have it accepted and published, about the potential for cost savings by combining the Falcon Heavy and reusable Falcon stage concepts. The SpaceX engineers do not talk until a system is about ready to fly! No one else knows exactly what recovery method would be used, or how hard it will be. The math to show the probable cost range, using conservative assumptions, is about as simple arithmetic as there is. The assumptions are everything.

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