The New Celestial Capitalists

JAMES W. BENSON, 52, HAD A SEVERE CASE OF been-there-done-that. He had gotten into the computer business on the ground floor, 30 years ago, eventually starting a commercial-software company in 1984. Having run out of challenges, he sold it in 1995, retired to Colorado--and found that he was bored out of his mind. So he looked up. The star-studded night sky in the Rockies reminded him of when, as a boy, he peered through his first telescope at the luminous rings of Saturn. Right then, Benson knew what he was going to do for his second career act: start a company to design, build and launch a spacecraft to a near-Earth asteroid. His SpaceDev would make money by selling cargo space to scientists who wanted to fly experiments to the asteroid. And it would market the data from the company's own explorations. Lurking in the background was the promise of the mother of all mother lodes: minerals on the asteroid that could amount to something like $80 trillion worth of gold, platinum and related goodies. ""SpaceDev,'' says Benson, ""is the world's first commercial space-exploration company.''

It has long been said that the way to make a small fortune in space is to start with a large one. But listen carefully, and you can hear the sounds of American entrepreneurs taking to their garages, like the computer revolutionaries a generation ago, crunching the numbers and deciding that space is the next commercial frontier. Some of the business schemes are gimmicky--delivering people's cremated remains into orbit or taking ""space tourists'' for a one-hour spin in low-Earth orbit. But others could provide unprecedented access to space for commerce as well as science. Package-delivery companies are figuring out ways to get a box from New York to Tokyo in 45 minutes via space. Launch companies are selling reservations on reusable rockets to firms that want to speckle the sky with a constellation of communications satellites--at half the cost of the space shuttle or an expendable rocket. In 1998 Boeing will open a private spaceport called Sea Launch in the Pacific Ocean off California. By one estimate, space could be a $120 billion-a-year business by 2000.

All of this is possible because NASA is only too happy to let industry take over mundane chores. ""NASA's job now is to press the frontiers--the physical frontiers, the knowledge frontiers, the technology and applications frontiers,'' says Ed Stone, director of NASA's Jet Propulsion Laboratory in Pasadena, Calif., which designs and operates scientific spacecraft like the Mars Pathfinder mission. That requires persuading private industry to take over the function of the space shuttle, for instance. To that end, NASA administrator Daniel Goldin told NEWSWEEK, the space agency is trying to ""privatize the routine functions of space. [That way], we can free up money to do the bolder things, like taking people beyond Earth orbit and trying to see if there's life beyond the solar system. We should no longer be in the business of putting payloads into low-Earth orbit or even operating the space shuttle.'' Goldin has matched his rhetoric with action: NASA is taking bids on a contract to manage the fabled Johnson Space Center in Houston, mission control for all of America's manned flights.

At least two companies hope to replace the shuttle with commercial, reusable launch vehicles. Kistler Aerospace Corp., based in Kirkland, Wash., has bought 34 old Soviet rocket engines that were developed for the Russians' moon-landing program but never used (the Soviets' program was killed in 1974). With a thermal protection system like the shuttle's, and parachutes and airbag like those that bring the shuttle's external tanks back to Earth, Kistler is literally going back to the future. ""We are proud that we are using trailing-edge technology,'' says Kistler chairman Robert Wang. ""Not only does it let us charge less than half what expendable launch vehicles do, but we don't blow up our customer's payload in case of an abort: we land it with parachutes and airbag and try again.'' Space Systems/Loral has contracted with Kistler for 10 unmanned launches of communications satellites, for just over $100 million, from late 1999 to early 2002. Six test flights are scheduled for 1998, launching from sites in either Nevada or Australia. Kistler plans a 1999 launch for Loral on the K-1 Reusable Launch Vehicle to ferry up one of the 56 satellites in the Globalstar constellation, which will transmit digital telecommunications.

Rotary Rocket, based in Redwood City, Calif., wants to beat Kistler into orbit. The company's name comes from the rotor on the craft, similar to a helicopter rotor, that will ""allow us to land the vehicle where we want to, like an airplane or helicopter, instead of coming in like the old rockets into the sea,'' explains Frederick Giarrusso, chief financial officer. Rotary, which is testing its components in the Mojave Desert, has scheduled the first suborbital flight tests for spring 1999, with manned orbital flights beginning that summer. For now, Rotary has set its sights on satellite launches, because ""that's what is driving the market,'' says Giarrusso. But in about five years, Rotary Rocket's vehicles could be sold to space tourism companies.

Thrill-seekers with strong stomachs don't have to wait. Since 1992 Interglobal Space Lines has been offering one-hour, zero-gravity flights in a private jet over the Mojave Desert for $2,000 per passenger. ""When these reusable vehicles [like Rotary's] get produced, we'll lease or buy them and we'll start selling tickets,'' says Rand Simberg, Interglobal's president. Zegrahm Space Voyages has announced that its first flight will launch Dec. 1, 2001, taking customers 60 miles up to experience weightlessness for 2.5 minutes. Zegrahm, undoubtedly hoping that the Dow Jones is in quintuple digits by then, plans to charge a mere $98,000. That's still so much less than current launch costs (roughly $10,000 per pound) that NASA's Alan Ladwig says, ""Either they're dreaming or they've got some kind of transportation technology in the garage that they're not telling anyone about.''

LunaCorp of Arlington, Va., is counting on customers who are content to keep their space trips virtual. It plans to launch a lunar mission within two years, land a rover the size of a Volkswagen Beetle on the moon and let visitors at a to-be-unannounced theme park operate it remotely, just the way engineers at JPL drove the Mars Sojourner during this summer's Pathfinder mission. Think of it as the first cool videogame of the 21st century.

Part of Goldin's plan to get NASA out of the business of building, maintaining and operating fleets is to ""convince private industry that space can be very profitable,'' he says. ""We are finally getting customers to spend their own money.'' Electronics makers are footing much of the bill for a flight of the Wake Shield on a shuttle flight scheduled for 2000. The 12-foot disk flies 20 miles above the shuttle. It creates a vacuum in its wake and sweeps away almost all of the orbital dust. In this clean vacuum (up to 10,000 times better than can be created on Earth) with zero gravity, automated experiments designed by NASA's Alex Ignatiev have produced, in the shield itself, extremely pure semiconducting film. It can be used for very-low-noise amplifiers, ultra-high-speed transistors, efficient photovoltaic cells and more powerful cell-phone antennas. Ignatiev's funding used to come solely from NASA, but now private investors, led by Texas Instruments, are convinced that the Wake Shield can make money for them.

Goldin has been spinning off bits and pieces of his empire for years. Already he's privatized the operation and construction of modules that sit inside the shuttle's cargo bay. These modules are used both for experiments and to carry payloads to resupply Mir, the troubled Russian space station where American astronauts have been practicing for the planned International Space Station (ISS). Spacehab Inc. of Vienna, Va., has figured out a way to build these modules for $185 million, compared with the $1.2 billion it would have cost the government. The module will take its 10th shuttle flight in January. ""We see ourselves as a commercial space services company,'' says chairman Shelley Harrison. The company went public in late 1995 and has its biggest job still ahead: supplying the ISS, perhaps including some of the assembly work, starting in 1998.

Even pure science need not remain a government monopoly. At least that's what SpaceDev's Benson is counting on. This year a NASA mission swept past the asteroid 253 Mathilde, en route to the asteroid Eros, for $300 million. Benson figures he can get a spacecraft to an asteroid for $50 million. That would buy, launch and operate an 880-pound craft with two solar panels for power, a communications disk, space for three of SpaceDev's own data-collecting instruments (a neutron spectrometer, a camera and an alpha-proton spectrometer to read the asteroid's composition), plus some instruments for private customers (diagram). Scientists would pay $15 million for access to the data or $10 million to $12 million to send an instrument of their own design along (scientists don't usually carry that kind of spending money; they would pay for it out of government grants, just as they buy microscopes or flasks). But because SpaceDev would get experiments to the asteroid on an economy ticket, ""the taxpayer would get more per science dollar,'' says Benson. He plans to start construction this spring and be ready for launch by early 2000. Of the 416 known near-Earth asteroids, hunks of rock a few miles across orbiting between Mars and Earth, six are ""really good candidates,'' Benson says.

Visiting an asteroid wouldn't be just for the love of science; there may be gold in them thar hills. If ground-based observations are right, these rocks contain 100 times the concentration of platinum-family elements that Earth does, and 10 times the concentration of gold. ""With our first flight we will know the mineral content of the asteroid and therefore its value,'' says Benson. But even if bringing back gold from a few million miles away doesn't pay, Benson figures, the lessons of the 19th-century gold rushes will still hold true in the new millennium: while the prospectors failed to get rich, the barons who owned the trains and coaches that took them out West made a bundle.