Category Archives: Business

It’s Not Just A Bad Idea, It’s The Law

There’s a long piece on the the current state of space law over at the ABA Journal. I only have a couple issues with it. First, I don’t know what they mean by this:

Even though the United States eventually outpaced the Soviet Union by putting men on the moon in 1969, the space race continued until the early 1990s.

No, the space race was essentially over by 1968 or so, once the Russians realized that they weren’t going to beat us to the moon, and instead rewrote history to pretend that they’d never even been trying. There was no urgency or racing after that–had there been, NASA budgets would have been higher, and schedules faster. So I don’t know what this sentence means, unless it just a vague reference to the fact that progress, such as it was, continue on both the US and Soviet side, until the fall of the Soviet Union.

On ITAR, I strongly disagree with Pam Meridith:

“I think the hysteria over ITARs is out of proportion,” says Pamela L. Meredith, who co-chairs the space law practice group at Zuckert, Scoutt & Rasen­berger in Washington, D.C. “They’ve been around for a long time now, so people have had time to adjust.”

No matter how much “time people have to adjust,” it still adds time and cost to projects, and prevents many from happening altogether. And it has a disproportionate effect–like most regulations, big space businesses (who despite leftist mythology, are no fans of capitalism or free enterprise) don’t necessarily dislike ITAR, because they can afford to meet the requirements, and they represent a barrier to entry to smaller businesses and newcomers, who generally can’t. (Though there’s also no question that it’s cost Boeing a lot of satellite business.) And as a perfect case in point, consider Mike Gold at Bigelow (in a long, but quite interesting interview):

Res Communis: Can you comment on a company’s cost of implementing ITAR?

Gold: Yes, absolutely. Paying so much for export control is a bit like being asked not just to dig your own grave, but to jump in it as well. Our best estimates are that we pay roughly $130.00 per hour, per person, for every hour that a government official monitors us or reviews our documentation during the day, plus overtime, which can add up on overseas trips. What amazes me is that when we travel to Russia for meetings, we sometimes travel with not one, but two government officials, monitoring every word we say. Then, across the table from us are the Russians, all great folks, who came out of a Communist system, and they have no explicit monitors. If we were to have brought someone down from Mars to attend our meetings, and asked them which of these two nations represented the free country, the Martian would point to the Russians. The U.S. holds itself out as the bastion of freedom. But when I am sitting there at those meetings I have to wonder: which is the free country? Now again, this is a problem of policy not personnel. The monitors we get are often good, smart people, who can even be quite helpful at times. However, what I want is for these monitors to be able to spend their limited time and resources focusing on military sensitive technologies that really matter rather than wasting their efforts on us. The Russians basically do this. They have the unique policy of protecting information that is actually sensitive. They don’t care about metal coffee tables. It makes a lot more sense. And, in regard to the financial costs, you know, the KGB may have spied on you back in the Soviet days, but at least they had the courtesy to do it for free. It is unfathomable to me what we have to pay for export control review and monitoring.

Res Communis: You do cover their travel expenses also?

Gold: Absolutely, including airfare and hotel. Specifically, in 2006, the year of the Genesis I campaign, we paid over $160,000 in monitoring fees alone. In 2007, when the Genesis II launch campaign took place, we paid the government nearly $150,000 for monitoring and reviews. Thanks to Mr. Bigelow’s generosity and commitment, we’re able to afford such fees, but there are a lot of small companies that can’t. This is why the ITAR has stifled innovation and stunted development in the American aerospace sector. The ITAR should be re-named “The Full Employment for European and Foreign Aerospace Workers Act.”

Res Communis: As between a new space company like Bigelow and the big aerospace corporations, is the ITAR burden disproportionate for the new companies?

Gold: Everyone has problems with it, but a large, well established company is better able to absorb the expenses and can pass the cost on to their customers relatively easily. Anecdotally, I have spoken to a number of friends and colleagues at small aerospace businesses and start-ups. They tell me that they don’t even look at international collaboration because they know they can’t afford to work through the export control problems without a hoard of attorneys. Frankly, it took a lot of work and diligence and a little bit of luck on our own part to have been able to survive the ITAR gauntlet with just myself, my deputy, and some limited support from outside counsel.

And because Bigelow is wealthy, and willing to foot the bill, he can afford it. Most startups aren’t in this position. This is just one of the many ways that federal policy has been disastrous, and continues to help bind us to the planet.

It’s Not Just A Bad Idea, It’s The Law

There’s a long piece on the the current state of space law over at the ABA Journal. I only have a couple issues with it. First, I don’t know what they mean by this:

Even though the United States eventually outpaced the Soviet Union by putting men on the moon in 1969, the space race continued until the early 1990s.

No, the space race was essentially over by 1968 or so, once the Russians realized that they weren’t going to beat us to the moon, and instead rewrote history to pretend that they’d never even been trying. There was no urgency or racing after that–had there been, NASA budgets would have been higher, and schedules faster. So I don’t know what this sentence means, unless it just a vague reference to the fact that progress, such as it was, continue on both the US and Soviet side, until the fall of the Soviet Union.

On ITAR, I strongly disagree with Pam Meridith:

“I think the hysteria over ITARs is out of proportion,” says Pamela L. Meredith, who co-chairs the space law practice group at Zuckert, Scoutt & Rasen­berger in Washington, D.C. “They’ve been around for a long time now, so people have had time to adjust.”

No matter how much “time people have to adjust,” it still adds time and cost to projects, and prevents many from happening altogether. And it has a disproportionate effect–like most regulations, big space businesses (who despite leftist mythology, are no fans of capitalism or free enterprise) don’t necessarily dislike ITAR, because they can afford to meet the requirements, and they represent a barrier to entry to smaller businesses and newcomers, who generally can’t. (Though there’s also no question that it’s cost Boeing a lot of satellite business.) And as a perfect case in point, consider Mike Gold at Bigelow (in a long, but quite interesting interview):

Res Communis: Can you comment on a company’s cost of implementing ITAR?

Gold: Yes, absolutely. Paying so much for export control is a bit like being asked not just to dig your own grave, but to jump in it as well. Our best estimates are that we pay roughly $130.00 per hour, per person, for every hour that a government official monitors us or reviews our documentation during the day, plus overtime, which can add up on overseas trips. What amazes me is that when we travel to Russia for meetings, we sometimes travel with not one, but two government officials, monitoring every word we say. Then, across the table from us are the Russians, all great folks, who came out of a Communist system, and they have no explicit monitors. If we were to have brought someone down from Mars to attend our meetings, and asked them which of these two nations represented the free country, the Martian would point to the Russians. The U.S. holds itself out as the bastion of freedom. But when I am sitting there at those meetings I have to wonder: which is the free country? Now again, this is a problem of policy not personnel. The monitors we get are often good, smart people, who can even be quite helpful at times. However, what I want is for these monitors to be able to spend their limited time and resources focusing on military sensitive technologies that really matter rather than wasting their efforts on us. The Russians basically do this. They have the unique policy of protecting information that is actually sensitive. They don’t care about metal coffee tables. It makes a lot more sense. And, in regard to the financial costs, you know, the KGB may have spied on you back in the Soviet days, but at least they had the courtesy to do it for free. It is unfathomable to me what we have to pay for export control review and monitoring.

Res Communis: You do cover their travel expenses also?

Gold: Absolutely, including airfare and hotel. Specifically, in 2006, the year of the Genesis I campaign, we paid over $160,000 in monitoring fees alone. In 2007, when the Genesis II launch campaign took place, we paid the government nearly $150,000 for monitoring and reviews. Thanks to Mr. Bigelow’s generosity and commitment, we’re able to afford such fees, but there are a lot of small companies that can’t. This is why the ITAR has stifled innovation and stunted development in the American aerospace sector. The ITAR should be re-named “The Full Employment for European and Foreign Aerospace Workers Act.”

Res Communis: As between a new space company like Bigelow and the big aerospace corporations, is the ITAR burden disproportionate for the new companies?

Gold: Everyone has problems with it, but a large, well established company is better able to absorb the expenses and can pass the cost on to their customers relatively easily. Anecdotally, I have spoken to a number of friends and colleagues at small aerospace businesses and start-ups. They tell me that they don’t even look at international collaboration because they know they can’t afford to work through the export control problems without a hoard of attorneys. Frankly, it took a lot of work and diligence and a little bit of luck on our own part to have been able to survive the ITAR gauntlet with just myself, my deputy, and some limited support from outside counsel.

And because Bigelow is wealthy, and willing to foot the bill, he can afford it. Most startups aren’t in this position. This is just one of the many ways that federal policy has been disastrous, and continues to help bind us to the planet.

It’s Not Just A Bad Idea, It’s The Law

There’s a long piece on the the current state of space law over at the ABA Journal. I only have a couple issues with it. First, I don’t know what they mean by this:

Even though the United States eventually outpaced the Soviet Union by putting men on the moon in 1969, the space race continued until the early 1990s.

No, the space race was essentially over by 1968 or so, once the Russians realized that they weren’t going to beat us to the moon, and instead rewrote history to pretend that they’d never even been trying. There was no urgency or racing after that–had there been, NASA budgets would have been higher, and schedules faster. So I don’t know what this sentence means, unless it just a vague reference to the fact that progress, such as it was, continue on both the US and Soviet side, until the fall of the Soviet Union.

On ITAR, I strongly disagree with Pam Meridith:

“I think the hysteria over ITARs is out of proportion,” says Pamela L. Meredith, who co-chairs the space law practice group at Zuckert, Scoutt & Rasen­berger in Washington, D.C. “They’ve been around for a long time now, so people have had time to adjust.”

No matter how much “time people have to adjust,” it still adds time and cost to projects, and prevents many from happening altogether. And it has a disproportionate effect–like most regulations, big space businesses (who despite leftist mythology, are no fans of capitalism or free enterprise) don’t necessarily dislike ITAR, because they can afford to meet the requirements, and they represent a barrier to entry to smaller businesses and newcomers, who generally can’t. (Though there’s also no question that it’s cost Boeing a lot of satellite business.) And as a perfect case in point, consider Mike Gold at Bigelow (in a long, but quite interesting interview):

Res Communis: Can you comment on a company’s cost of implementing ITAR?

Gold: Yes, absolutely. Paying so much for export control is a bit like being asked not just to dig your own grave, but to jump in it as well. Our best estimates are that we pay roughly $130.00 per hour, per person, for every hour that a government official monitors us or reviews our documentation during the day, plus overtime, which can add up on overseas trips. What amazes me is that when we travel to Russia for meetings, we sometimes travel with not one, but two government officials, monitoring every word we say. Then, across the table from us are the Russians, all great folks, who came out of a Communist system, and they have no explicit monitors. If we were to have brought someone down from Mars to attend our meetings, and asked them which of these two nations represented the free country, the Martian would point to the Russians. The U.S. holds itself out as the bastion of freedom. But when I am sitting there at those meetings I have to wonder: which is the free country? Now again, this is a problem of policy not personnel. The monitors we get are often good, smart people, who can even be quite helpful at times. However, what I want is for these monitors to be able to spend their limited time and resources focusing on military sensitive technologies that really matter rather than wasting their efforts on us. The Russians basically do this. They have the unique policy of protecting information that is actually sensitive. They don’t care about metal coffee tables. It makes a lot more sense. And, in regard to the financial costs, you know, the KGB may have spied on you back in the Soviet days, but at least they had the courtesy to do it for free. It is unfathomable to me what we have to pay for export control review and monitoring.

Res Communis: You do cover their travel expenses also?

Gold: Absolutely, including airfare and hotel. Specifically, in 2006, the year of the Genesis I campaign, we paid over $160,000 in monitoring fees alone. In 2007, when the Genesis II launch campaign took place, we paid the government nearly $150,000 for monitoring and reviews. Thanks to Mr. Bigelow’s generosity and commitment, we’re able to afford such fees, but there are a lot of small companies that can’t. This is why the ITAR has stifled innovation and stunted development in the American aerospace sector. The ITAR should be re-named “The Full Employment for European and Foreign Aerospace Workers Act.”

Res Communis: As between a new space company like Bigelow and the big aerospace corporations, is the ITAR burden disproportionate for the new companies?

Gold: Everyone has problems with it, but a large, well established company is better able to absorb the expenses and can pass the cost on to their customers relatively easily. Anecdotally, I have spoken to a number of friends and colleagues at small aerospace businesses and start-ups. They tell me that they don’t even look at international collaboration because they know they can’t afford to work through the export control problems without a hoard of attorneys. Frankly, it took a lot of work and diligence and a little bit of luck on our own part to have been able to survive the ITAR gauntlet with just myself, my deputy, and some limited support from outside counsel.

And because Bigelow is wealthy, and willing to foot the bill, he can afford it. Most startups aren’t in this position. This is just one of the many ways that federal policy has been disastrous, and continues to help bind us to the planet.

Fascists Of The Corn

David Freddoso is still angry about our insane and, in my opinion, criminal ethanol and sugar policies:

The problem is that our sugar industry has even better lobbyists than big ethanol. They enjoy price supports, which we pay for both through the Treasury and in the supermarket. The price of our sugar is usually twice that of the world market. The sugar growers love it — even if they cannot sell all of their sugar, they have a guaranteed government buyer at an inflated price. The corn growers love it too, because high U.S. sugar prices push our food industries to use high-fructose corn syrup (ever seen that on a product label?) as an alternative sweetener — yet another artificial support for the world price of corn.

Not to mention wreaking havoc on the Everglades. Price-supported sugar cane is using up a lot of the water that both south Floridian humans and animals need, and they do this with the same political clout that they use to get the subsidies and tariffs, for an industry that is not all that big in terms of the economy.

Even if we want ethanol, we can’t solve the problem by importing sugar, because there are tariffs in place. We can’t import the ethanol itself because there’s a high tariff against that, too. Wherever you turn, there’s no way out — Americans don’t enjoy economic freedom, we live in a managed economy.

It makes me especially proud of my country when I see Sen. Chuck Grassley (R-Iowa) call foreign delegates’ concerns over a potential doubling of world hunger “a joke…”

Let’s call these people out for what they are–Republicans and Democrats alike–fascists. Not that there’s anything wrong with that.

[Update a few minutes later]

Biofool.

[Update early evening]

Oh, wonderful:

Key House and Senate farm bill negotiators reached agreement today on the main elements of the farm bill…[T]he five-year bill would raise the target prices and loan rates for northern crops beginning in 2010, raise the sugar loan rate three-quarters of a cent and include a sugar-to-ethanol program.

Oh, that’s just great. We have a program that makes us overpay for sugar, and now we’re going to start a new program to subsidize the ethanol we create from it — because without the subsidy, the inflated sugar price we’ve created will make the ethanol unprofitable.

Just when you think it can’t get any worse, they always find a way.

Rocket Racing Competition

Alan Boyle has more info on this morning’s press announcement from the Rocket Racing League. It looks like they haven’t necessarily dropped XCOR as a supplier (as I previously speculated–note that there is a comment in that post, ostensibly from someone from the RRL, saying it was good news for everyone), but are looking for more competition for propulsion, so now they’ll have a kerosene engine from XCOR and an alcohol engine from Armadillo. If they can spread the wealth and expand the industrial base for these technologies, that’s all to the good.

And this should gladden the hearts of LLC competitors:

Carmack recently said he would make rocket engines available to customers at a cost of $500,000 apiece. He declined to say exactly how much the racing league was paying Armadillo for the current project – but he said the project had a higher priority than Armadillo’s renewed push to win the NASA-funded Lunar Lander Challenge.

That could conceivably mean that they won’t even bother, and will leave the money on the table for someone else, but even if they compete this year, their chances of winning will be reduced if they’re not focused on it, so it could represent an opportunity for Masten, Unreasonable Rocket, and others.

Anyway, I’m glad to see this industry finally (literally) getting off the ground. I wrote a paper at STAIF ten years ago that we needed a racing industry to push the technology, just as occurred in the auto (and air) racing business. A lot of people at the session in which I presented it were skeptical at the time, but it looks like my vision is finally coming to fruition.

[Mid-morning update]

Here’s another pre-press-conference report from the New York Times.

[Update a couple minutes later]

Clark Lindsey live blogged the press conference via call-in. I don’t see any mention of XCOR.

Reinventing The Wheel

Thomas James has a question that I’ve often wondered about as well:

I have to wonder, has every project I have ever worked on with LM (X-33, VentureStar, ET, CEV/Orion, among others) started from scratch with everything from numbering schemes to release processes to configuration management to data vaulting to drawing formats and standards to basic skill mix and team structures? You’d think that after so many decades that a lot of this stuff would have become routine by now — revised periodically as new technology becomes available, of course, but not built anew every time.

A counter argument to this — and one I used frequently when confronted with the All-Encompassing Michoud Excuse for Not Improving Processes: “That’s the way ET does it” — is that one ought to take advantage of the start of a new program to incorporate the lessons learned from other programs, thereby continuously improving the way business is done. Unfortunately, there doesn’t seem to be a middle ground between status quo and Year Zero when it comes to these things.

Every time we used to do a proposal at Rockwell/Boeing, and have to describe the systems engineering process, it seemed like we had to come with a new process flow description and graphic, as though we’d never done this before, instead of taking an existing one and tweaking it, and this applied all across the board–in risk mitigation and management, trade analyses, etc.

If I were running one of these multi-billion dollar corporations, I’d put someone in charge of boilerplate and legacy, so that there was a one-stop shop of best practices and material for use in both proposing and managing programs. Maybe they have one, and I was always unaware of it, but if that’s the case, that’s a big problem as well.

What Are They, Chopped Liver?

Apparently Aerojet is getting into the responsive reusable engine business (albeit with Air Force funding). I think that’s great, but I have to wonder if the reporter has been paying attention to what has been going on in the industry:

The last US-designed and produced hydrocarbon engine was the Rocketdyne RS-27, based on 1960s technology and now out of production.

There may be some qualifying adjectives that would make that statement true (of thrust greater than X? Used in an orbital launch system?), but folks like XCOR and Armadillo, and Masten, and several contenders for the LLC would be surprised to learn that they haven’t been designing and producing hydrocarbon engines for the past few years.

The Dog That Didn’t Bark

The Rocket Racing League is going to make a press announcement on Monday, but the release raises some questions:

Rocket Racing League Composites Corp. will announce the acquisition of a leading aircraft manufacturer and a partnership with a leading engine manufacturer…

…WHO:
Granger Whitelaw, CEO, Rocket Racing League
Peter Diamandis, Co-Founder, Rocket Racing League
Adam Smith, Vice President, EAA
Len Fox, Test Pilot, Rocket Racing Composites Corp.
Scott Baker, President, Velocity Aircraft
Neil Milburn, Armadillo Aerospace
John Carmack, Armadillo Aerospace

We have a missing player, and a new player. XCOR was building the initial racers, but they don’t seem to be represented at the event. And this is the first time that I’ve heard Armadillo associated with the project. So apparently, for whatever reason, Armadillo is now providing propulsion for the racers, and they’re apparently acquiring an aircraft manufacturer (Velocity?). I wonder why they have to acquire Velocity. Can’t they just buy modified aircraft? Or maybe they’re being imprecise in language, and it’s also a partner?

This obviously raises many questions, none of which I know the answers to, but it would seem to be bad news (though of course by no means fatal) for XCOR. It certainly won’t affect their work on the Lynx. It’s also good news for Armadillo, and it means a new customer with apparent confidence in their hardware, even after the engine problems at the cup last October.

Perhaps the questions will be answered at the press conference, if asked.

[Update a few minutes later]

Actually, on reconsideration, it’s not even obvious that it is bad news for XCOR (though clearly John Carmack must think that it’s good for Armadillo, or he wouldn’t have done the deal). It could be that, now that they’re trying to focus on developing a true suborbital vehicle, the RRL work was proving to be a distraction for them that they’ve now gotten out from under. But it’s speculation on my part, either way.