NASA studies "incentives" for VentureStar

Washington DC – May 22, 1998 – The civil space agency has begun an internal study on the need for possible additional financial incentives for the builder of the follow-on to the X-33 Reusable Launch Vehicle demonstrator, the NASA RLV chief told SpaceCast in Washington Thursday.

Gary Payton refused to rule out any specific forms that such new incentives might take, including additional taxpayer funding for such commercial RLV projects as the Lockheed Martin VentureStar. “I’m not smart enough to know now what these will include,” Payton said during a breakfast briefing of the Space Transportation Association on Capitol Hill.

Payton said that NASA analyst Lori Garver, former head of the National Space Society and now a NASA employee, would be heading the study, which is to be completed this summer. Included in the potential list of incentives are cash reimbursements, changes in tax laws, tax “holidays”, and direct funding beyond the current $900 million federal contribution to the VentureStar’s precursor, the X-33 subscale technology demonstrator.

Under the terms of the July, 1996 contract award, Lockheed Martin will have sole access to the test results from the X-33 research flights, which will start in the summer of 1999 and end that fall. While Payton suggested Thursday that the commercial RLV incentives would be available to other potential space vehicle developers, many suspect that the effort is a thinly veiled attempt at getting LockMart more financial support from the federal treasury for their RLV project.

Recent studies, reported in SpaceCast, strongly suggest that Lockheed will be unable to finance development of a commercial RLV such as VentureStar without more direct financial help from the government.

While Garver’s report is awaited in Washington, some have pointed out the
irony of this recent turn of events concerning the RLV project. Garver,
SpaceCast was reminded by some critics of the project, has no experience in
private industry or in business at all, having been previously the
executive director of NSS and a member of a political campaign organization
(Sen. John H. Glenn’s 1984 Presidential campaign).

Yet her analysis may shape new legislation to help finance a business development of a commercial launch system. And still others in the commercial space community are asking: “Should NASA be in the business of funding a commercial launch vehicle under ANY circumstances?”