Prepared Statement by Elon Musk at a Senate Hearing on Space Shuttle and the Future of Space Launch Vehicles

Mr. Elon Chief Executive Officer and Chief Technology Officer,, Space Exploration Technologies Group

Mr. Chairman and Members of the Committee, thank you for inviting me to testify today on the future of Space Launch Vehicles and what role the private sector might play.

The past few decades have been a dark age for development of a new human space transportation system. One multi-billion dollar Government program after another has failed. In fact, they have failed even to reach the launch pad, let alone get to space. Those in the space industry, including some of my panel members, have felt the pain first hand. The public, whose hard earned money has gone to fund these developments, has felt it indirectly.

The reaction of the public has been to care less and less about space, an apathy not intrinsic to a nation of explorers, but born of poor progress, of being disappointed time and again. When America landed on the Moon, I believe we made a promise and gave people a dream. It seemed then that, given the normal course of technological evolution, someone who was not a billionaire, not an astronaut made of "The Right Stuff", but just a normal person, might one day see Earth from space. That dream is nothing but broken disappointment today. If we do not now take action different from the past, it will remain that way.

What strategies are critical to the future of space launch vehicles?

1. Increase and Extend the Use of Prizes

This is a point whose importance cannot be overstated. If I can emphasize, underscore and highlight one strategy for Congress, it is to offer prizes of meaningful scale and scope. This is a proposition where the American taxpayer cannot lose. Unlike standard contracting, where failure is often perversely rewarded with more money, failure to win a prize costs us nothing.

Offering substantial prizes for achievement in space could pay enormous dividends. We are beginning to see how powerful this can be by observing the X Prize, a prize for suborbital human transportation, which is on the verge of being won. It is a very effective use of money, as vastly more than the $10 million prize is being spent by the dozens of teams that hope to win. At least as important, however, is the spirit and vigor it has injected into the space industry and the public at large. It is currently the sole ember of hope that one day they too may travel to space.

Beyond space, as the Committee is no doubt aware, history is replete with examples of prizes spurring great achievements, such as the Orteig Prize for crossing the Atlantic nonstop by plane and the Longitude prize for ocean navigation.

Few things stoke the fires of creativity and ingenuity more than competing for a prize in fair and open competition. The result is an efficient Darwinian exercise with the subjectivity and error of proposal evaluation removed. The best means of solving the problem will be found and that solution may be in a way and from a company that no-one ever expected.

One interesting option might be to parallel every major NASA contract award with a prize valued at one tenth of the contract amount. If another company achieves all of the contract goals first, they receive the prize and the main contract is cancelled. At minimum, it will serve as competitive spur for cost plus contractors.

Some people believe that no serious company would pursue a prize. This is simply beside the point: if a prize is not won, it costs us nothing. Put prizes out there, make them of a meaningful size, and many companies will vie to win, particularly if there are a series of prizes of successively greater difficulty and value.

I recommend strongly supporting and actually substantially expanding upon the proposed Centennial Prizes put forward in the recent NASA budget. No dollar spent on space research will yield greater value for the American people than those prizes.

2. Rigorously Examine How Any Proposed New Vehicle Will Improve the Cost of Access to Space

The obvious barrier to human exploration beyond low Earth orbit is the cost of access to space. This problem of affordability dwarf's all others. If we do not set ourselves on the track of solving it with a constantly improving price per pound to orbit, in effect a Moore's law of space, neither the average American nor their great-great-grandchildren will ever see another planet. We will be forever confined to Earth and may never come to understand the true nature and wonder of the Universe. So it is critical that we thoroughly examine the probable cost of alternatives to replacing the Shuttle before embarking upon a new development. The Shuttle today costs about a factor of ten more per flight than originally projected and we don't want to be in a similar situation with its replacement.

In fact, it was precisely to improve the cost and reliability of access to space, initially for satellites and later for humans, that I established SpaceX (although some of my friends still think the real goal was to turn a large fortune into a small one). Our first offering, called Falcon I, will be the world's only semi-reusable orbital rocket apart from the Space Shuttle. Although Falcon I is a light class launch vehicle, we have already announced and sold the first flight of Falcon V, our medium class rocket. Long term plans call for development of a heavy lift product and even a super-heavy, if there is customer demand. We expect that each size increase would result in a meaningful decrease in cost per pound to orbit. For example, dollar cost per pound to orbit dropped from $4000 to $1300 between Falcon I and Falcon V. Ultimately, I believe $500 per pound or less is very achievable.

3. Ensure Fairness in Contracting

It is critical that the Government acts and is perceived to act fairly in its award of contracts. Failure to do so will have an extremely negative effect, not just on the particular company treated unfairly, but on all private capital considering entering the space launch business.

SpaceX has directly experienced this problem with the contract recently offered to Kistler Aerospace by NASA and it is worth drilling into this as a case example. Before going further, let me make clear that I and the rest of SpaceX have a high regard for NASA as a whole and have many friends & supporters within the organization. Although we are against this particular contract and believe it does not support a healthy future for American space exploration, this should be viewed as an isolated difference of opinion. As mentioned earlier, for example, we are very much in favor of the NASA Centennial Prize initiative.

For background, the approximately quarter billion dollars involved in the Kistler contract would be awarded primarily for flight demonstrations & technology showing the potential to resupply the Space Station and possibly for transportation of astronauts.

That all sounds well and good. The reason SpaceX is opposing the contract and asking the General Accounting Office to put this under the microscope is that it was awarded on a sole source, uncompeted basis to Kistler instead of undergoing a full, fair and open competition. SpaceX and other companies (Lockheed and Spacehab also raised objections) should have, but were denied the opportunity to compete on a level playing field to best serve the American taxpayer. Please note that this is a case where SpaceX is only asking for a fair shot to meet the objectives, not demanding to win the contract.

The sole source award to Kistler is mystifying given that the company has been bankrupt since July of last year, demonstrating less than stellar business execution (if a pun is permitted). Moreover, Kistler intends to launch from Australia using all Russian engines, raising some question as to why this warrants expenditure of American tax dollars.

Now, although we feel strongly to the contrary, it is possible that NASA has made the right decision in this case. However, does awarding a sole source contract to a bankrupt company over the objections of others sound like a fair decision? Common sense suggests the answer. Whether Kistler does or does not ultimately deserve to win this contract, it should never have been awarded without full competition.

Again, thank you for inviting me to testify before you today.

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